September 3, 2020

Reminder: Distribute Medicare Part D Notices by October 15th

Plan sponsors have an annual obligation to provide the Medicare Part D creditable coverage notices to Medicare-eligible individuals.  The annual Medicare Part D open enrollment period for the 2021 year begins October 15, 2020 and closes December 7, 2020.

Who gets the Medicare Part D notice?  The notice must be provided to all Medicare-eligible individuals including employees, former employees and Medicare-eligible dependents covered by the plan or who become eligible to enroll in the plan. 

Contents of notice.  The Centers for Medicare and Medicaid Services (CMS) provide model language that can be tailored by plan sponsors to satisfy their notice obligation:

  • Model Individual Creditable Coverage Disclosure Notice (English or Spanish)
  • Model Individual Non-Creditable Coverage Disclosure Notice (English or Spanish)

Timeframe for providing notice.  The Medicare Part D Notice of Creditable or Non-creditable Coverage must be provided at least annually, prior to the Medicare Part D open enrollment period.  This means that all Medicare Part D notices of creditable or non-creditable coverage must be provided within the 12-month period ending on October 15, 2020.  In addition, the notice must be provided prior to an individual’s initial enrollment in Part D, prior to the effective date of coverage for any Medicare-eligible individual that joins the plan, at the point when prescription drug coverage ends, or changes from creditable to non-creditable coverage, or vice versa; and upon an individual’s request.

Form and manner of providing notice.  The notice must be written and can be delivered in paper, either by hand or by US mail.  It can be included in plan materials as long as the creditable coverage is prominently displayed in at least 14-point font in a separate box, bolded or offset on the first page of plan participant information. 

The disclosure notice may be provided electronically only if the Medicare beneficiary has adequate access to electronic information.  Prior to agreeing to receive information electronically, the individual must be informed of right to obtain a paper version, and the procedures for withdrawing consent and updating address information, and identify any hardware or software requirements to access and retain the creditable coverage disclosure.  If an individual consents to electronic distribution, a valid e-mail address must be provided to the entity, and the beneficiary’s consent must be submitted electronically to the entity.  In addition to e-mailing the disclosure notice to the beneficiary, the entity must also post the notice on its website, if applicable, with a link to the creditable coverage notice on the entity’s homepage.

The Medicare Part D notice to participants is distinct from the annual Medicare Part D Disclosure Notice obligation to CMS, which must be accomplished by all group health plans within 60 days of the beginning of the plan year (generally, March 1 for calendar year plans).  It must also be completed within 30 days upon other events such as when the prescription drug benefit is cancelled, or if any material change in the prescription drug benefits that would cause it to change status from creditable to non-creditable, or vice versa.  CMS provides both guidance and instructions, as well as access to the disclosure form on its website.

The information contained in this article is provided as general guidance and may be affected by changes in law or regulation. This article is not intended to replace or substitute for accounting or other professional advice. Please consult a CBIZ professional. This information is provided as-is with no warranties of any kind. CBIZ shall not be liable for any damages whatsoever in connection with its use and assumes no obligation to inform the reader of any changes in laws or other factors that could affect the information contained herein.

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