Medicare prescription drug coverage is available to all individuals who are enrolled in Medicare. Medicare has special rules that apply to those eligible individuals who have group health plan coverage through their own employer or through a spouse's employer. Group health plans of employers with 20 or more employees must offer these Medicare eligible employees the same health insurance benefits under the same conditions that younger workers and spouses receive.
In other words, an employer cannot discriminate against older employees by assessing higher premiums or excluding certain benefits simply on the basis of them reaching Medicare age.
Prescription Drug Coverage Enrollment Period
The Medicare fall Open Enrollment Period begins each year on October 15 and ends December 7. Plan sponsors (who are usually the employers) of group health plans that provide prescription drug coverage must distribute required creditable coverage disclosure notices to Medicare eligible participants prior to October 15.
You should have received a sample of this notice from your insurer or contacted HNI for the same in early October and distributed the same to your plan participants prior to October 15.
The Part D prescription drug coverage is available to Medicare eligible individuals. Medicare prescription drug coverage insurance covers both brand-name and generic prescription drugs at participating pharmacies. Like all insurance, the purpose of Medicare prescription drug coverage is to provide protection for people who have very high drug costs or from unexpected prescription drug bills in the future.
Employer Notice Violations
All employers have two notice obligations:
1. October: As briefly explained above, in accordance with the rules monitored by the Centers for Medicare & Medicaid Services (CMS), plan sponsors of group health plans with include prescription drug coverage must notify Medicare eligible policyholders whether their prescription drug coverage is creditable coverage or not-creditable. Creditable coverage means that the coverage is expected to pay, on average, as much as the standard Medicare prescription drug coverage.
This annual fall notice requires disclosure prior to each October 15th to all Medicare eligible individuals who are covered under its prescription drug plan. There may be other times when this notice obligation is triggered such as when a Medicare eligible individual joins the plan. This disclosure must be provided to Medicare eligible active working individuals and their dependents, Medicare eligible COBRA individuals and their dependents, Medicare eligible disabled individuals covered under your prescription drug plan and any retirees and their dependents.
There is a late enrollment penalty on individuals who do not maintain creditable coverage for a period of 63 days or longer following their initial enrollment period for the Medicare prescription drug benefit. Thus, failure by an eligible individual to enroll into Part D prescription coverage when a plan does not have creditable coverage has financial consequences. If this failure is due to the employer’s failure to provide this notice in a timely fashion, the employee will look to the employer to pay these penalties given the neglect of the employer. The employee will assert he/she would have signed up for this required coverage had he/she been timely informed of the need to do so.
2. February: The pending disclosure requirement at this time of year requires plan sponsors to complete the Online Disclosure to CMS Form to report the creditable coverage status of their prescription drug plan.
This disclosure should be completed annually no later than 60 days from the beginning of a plan year (aka your contract year or renewal year), within 30 days after termination of a prescription drug plan, or within 30 days after any change in creditable coverage status. Thus, the end of February is the deadline for calendar year plans. Fiscal year plans have until 60 days after the end of their fiscal health plan year to complete this notice requirement. However, please note the initial October creditable coverage disclosure requirement still applies to fiscal year end health plans.
