The Centers for Medicare and Medicaid Services (CMS) have issued new model notices of creditable and non-creditable coverage, as well as a personalized disclosure notice, to be used beginning on or after February 15, 2007. Although the substance of these notices is similar to prior versions, the language in the new notices should be used.  In addition, all three forms are now available in both English and Spanish.  

Timing of Notice

As a reminder, the notice of creditable and non-creditable coverage must be provided to Medicare-eligibles at the following times:

1. Prior to the individual’s initial enrollment period in Medicare Part D;
2. Prior to the effective date of enrolling in the sponsor’s plan, and upon any change that affects whether the coverage is creditable or not;
3. Prior to the beginning of the annual coordinated election period beginning November 15th through December 31st of each year; and
4. Upon an individual’s request.

Manner of Providing Notice

The rules relating to disclosure of these notices is substantially the same.  Distribution of the notice can be accomplished in hard copy, or electronically, as long as the Department of Labor’s electronic notice rules are followed.

The Guidance does clarify, in the limited situation in which employees have daily access to the employer’s computer system, the notice can be provided to the employee through the employer’s system, with a clear notation that it is the employee’s responsibility to provide the notice to Medicare-eligible dependents.

Revised Guidance and New Model Notices

The Updated CMS Guidance, and the model notices to be used on or after February 15, 2007, can be obtained from the CMS website.  From this website, you can view, download, or print any of the following items:

• Updated Guidance - Disclosure of Creditable Coverage to Medicare Part D Eligible Individuals Guidance (PDF, 113KB)
• Model Notices for use after February 15, 2007:
  • Model Individual Creditable Coverage Disclosure Notice - English (Zip, 13KB)
  • Model Individual Creditable Coverage Disclosure Notice - Spanish (Zip, 15KB)
  • Model Individual Non-Creditable Coverage Disclosure Notice - English (Zip, 15KB)
  • Model Individual Non-Creditable Coverage Disclosure Notice - Spanish (Zip, 14KB)
  • Model Personalized Individual Disclosure Notice - English (Zip, 13KB)
  • Model Personalized Individual Disclosure Notice - Spanish (Zip, 16KB)

Annual Disclosure Notice to CMS by Plan

Annually, a plan must file information with CMS about whether the prescription drug benefit is creditable or non-creditable.  This information must be provided within 60 days of the beginning of the plan year, and must be filed electronically.  The 2007 edition of the disclosure form is available via the CMS website.

The information contained in this Benefit Beat is not intended to be legal, accounting, or other professional advice, nor are these comments directed to specific situations.

As required by U.S. Treasury rules, we inform you that, unless expressly stated otherwise, any U.S. federal tax advice contained in this Benefit Beat is not intended or written to be used, and cannot be used, by any person for the purpose of avoiding any penalties that may be imposed by the Internal Revenue Service.