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Notice Requirements
1. Who must receive the notice?
2. What is the purpose of providing the notice?
3. What is the standard Medicare prescription drug coverage?
4. Does the notice have to be sent separately? Does a notice have
to be sent to spouses and dependents as well?
5. What must be included in the notice?
6. When should the employer disclosure notices be distributed?
7. Must I notify CMS of our plans' creditable coverage status?
1. Who must receive the notice?
All Part D eligible individuals
who are covered by an employer health plan with outpatient prescription drug coverage
must receive a notice regardless of whether the employer coverage is primary or
secondary to Medicare. The notice must be provided to all Part D eligible individuals,
whether covered as active employees, retirees, COBRA recipients, disabled individuals,
or as dependents. It is acceptable to send the notice to all plan participants.
2. What is the purpose of providing the notice?
The purpose of the notice is
to help individuals decide whether to retain their current prescription drug coverage,
or to enroll in the new Medicare prescription drug coverage. If an eligible individual
is covered under a plan that is providing prescription drug coverage that is comparable
to the coverage available under Medicare Part D (called credible coverage), they
will not be charged a late enrollment penalty if they choose to continue their employer
sponsored coverage and enroll in a Medicare prescription drug program at a later
open enrollment date. If the coverage for prescription drugs under their plan is
not as good as the standard Medicare prescription drug coverage plan during their
initial open enrollment period, they may be subject to a late enrollment penalty
once they do enroll for the rest of the time they are enrolled in the Medicare prescription
drug program.
3. What is the standard Medicare prescription drug coverage?
- $250 drug deductible
- Medicare will pay 75% of drug costs up to $2,250
- Enrollee pays 100% of drug costs between $2,250 and $5,100 (Called a "coverage gap")
- After $3,600 in True Out-Of-Pocket ("TrOOP") spending, Medicare will pay approximately
95%
4. Does the notice have to be sent separately? Does a notice have to be sent to
spouses and dependents as well?
The notice does not have to be
sent as a separate mailing. CMS has provided for flexibility in distribution of
the notice. It may be sent with other plan participant materials. If the notice
is included with other plan participant materials, it must be prominently referenced
in at least 14-point font. The employer may provide the notice through electronic
means, but only if the Medicare beneficiary has indicated that he or she has adequate
access to electronic information, and has been informed of his or her right to obtain
a paper version.
5.
What must be included in the notice?
CMS has developed
sample model notices for credible and non-credible coverage. The list in the
Medicare Part D section provides you with the links to
both of these model notices.
6. When should the employer disclosure notices be distributed?
- Prior to the Medicare Part D Annual Coordinated Election Period beginning November
15th each year;
- Prior to an individual's initial enrollment period for Part D;
- Prior to the effective date of coverage for any Medicare eligible individual that
joins the plan;
- Whenever prescription drug coverage ends or changes so that it is no longer credible
or becomes creditable; and
- Upon a beneficiary request.
Note: The first two bullets above will be deemed to be met if that notice is provided
to all plan participants at least once a year, prior to November 15. An annual notice,
along with notice included in enrollment materials would be options to ensure all
eligible individuals receive the required notice.
7. Must I notify CMS of our plans' creditable coverage status?
You must provide a copy of your
notice to CMS on an annual basis. CMS will provide future guidance relating to this
requirement in the fall of 2005.
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