1. I don't have a retiree plan - does this even apply to me?
2. What is Medicare Part D?
3. Who is eligible for Medicare Part D?
4. Are Part D eligible individuals required to enroll in Part D?
5. How does Medicare Part D enrollment work for an individual?
6. What are the key dates to be aware of?
7. How does this impact me as an employer?
8. What guidelines can I follow to determine if the coverage provided under our plan is creditable coverage?

1. I don't have a retiree plan - does this even apply to me?
Yes, the requirement to provide notices applies to all employers who have Part D eligible individuals enrolled in their plan, whether they are active employees, retirees or dependents. The issue, is do employers know every person on their plan that is Medicare eligible? Employers providing drug coverage as part of their plan are required by law to inform all Medicare-eligible individuals if their current plan provides credible coverage.

2. What is Medicare Part D?
Medicare Part D is a new Medicare prescription drug program beginning January 1, 2006. Under this program, Medicare beneficiaries can receive federally subsidized prescription drug coverage. Medicare beneficiaries will receive extensive information from both the government and health care insurers about this program over the next few months.

3. Who is eligible for Medicare Part D?
If the individual is entitled to Medicare Part A and/or enrolled in Part B, they are eligible for Part D.

In general, a person has Part A coverage if he or she has attained age 65 and receives monthly Social Security benefits or is a qualified railroad retirement beneficiary. Individuals under age 65 may also become entitled to Medicare benefits if they receive at least 24 months of Social Security benefits based on disability.

Detailed information about Medicare Part A and Part B eligibility and enrollment is provided in the Centers for Medicare and Medicaid Service (CMS) publication "Enrolling in Medicare" (publication number 11036). This publication is available on line at:
http://www.medicare.gov/publications/pubs/pdf/11036.pdf

4. Are Part D eligible individuals required to enroll in Part D?
A Medicare beneficiary who has another source of prescription drug coverage that is at least as good as the Medicare drug plan can remain in that plan, and will not have to pay higher premiums if he or she later signs up for the Medicare drug benefit. A Medicare beneficiary whose coverage is not as good as the Medicare drug plan, (non-credible coverage), will likely have to pay a higher Part D premium of 1 percent per month if he or she does not enroll in Part D during his or her initial enrollment period. (See question 5 below).

5. How does Medicare Part D enrollment work for an individual?
There is an initial open enrollment period beginning on November 15, 2005, and continuing through May 15, 2006. After the initial enrollment period, newly eligible individuals are eligible during the 3 months before their Medicare eligibility date, the month of their eligibility date, until 3 months after that date. If an eligible individual doesn't enroll during this period, they will likely pay a higher premium penalty for late enrollment.

6. What are the key dates to be aware of?

• September 30, 2005 - Deadline for filing the employer retiree drug subsidy application.
• October 30, 2005 - CMS has allowed a little extension for filing the employee retiree drug subsidy application.
• November 14, 2005 - Part D open enrollment begins and runs through May 15, 2006. The next open enrollment will be November 15, 2006 through December 31, 2006.
• January 1, 2006 - Medicare Part D Coverage begins for those who have enrolled.

7. How does this impact me as an employer?
If you offer drug coverage to Medicare eligible individuals, you are required by CMS to do the following:

• Determine if your group plan provides "creditable coverage" or "non-creditable coverage". In general, a creditable coverage is defined as coverage at least as good as the standard Medicare Part D benefit.
• You must communicate the status of your plan to Part D eligible individuals by November 14th, regardless of whether your plan is creditable or non-creditable.
• If you are a group that offers prescription drug benefits for Medicare eligible Part D employees, retirees and dependents, you should review and make decisions about available options in offering prescription drug benefits.  If you elect to apply for a subsidy, application and required documentation must be submitted to CMS by September 30, 2005.

8. What guidelines can I follow to determine if the coverage provided under our plan is creditable coverage?
CMS has simplified the process for an employer to determine if its prescription drug plan is creditable. If an employer is not applying for the retiree drug subsidy, its plan is creditable if the plan design meets all four of the following standards:

• Provides coverage for brand and generic prescriptions;
• Provides reasonable access to retail providers and, optionally, for mail order coverage;
• The plan is designed to pay on average at least 60% of participants' prescription drug expenses; and
• Satisfies at least one of the following:
  • For entities that have stand-alone prescription drug plans, the plan must satisfy one of the following:
    • The prescription drug coverage has no maximum annual benefit or a maximum annual benefit payable by the plan of at least $25,000, or The prescription drug coverage has an actuarial expectation that the amount payable by the plan will be at least $2,000 per Medicare Part D eligible individual in 2006.
  • For entities that have integrated health coverage, the integrated health plan has no more that a $250 deductible per year, has no annual benefits maximum or a maximum annual benefit payable by the plan of at least $25,000 and has not less that a $1,000,000 lifetime combined benefit maximum. An integrate plan is a plan that has one or more benefits combined, such as medical and prescription drug, medical, dental and prescription drug, etc.