The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) added a new prescription drug program to Medicare, Part D. Under the regulations issued in January 2005, most entities that provide prescription drug coverage to Medicare Part D eligible individuals are required to disclose to the Centers for Medicare & Medicaid Services (CMS) whether the coverage is “creditable prescription drug coverage.” Under the regulations, CMS is required to provide information regarding the form and manner of the disclosure. At the end of 2005, CMS issued guidance on the disclosure notice.
The disclosure notice is relatively short and can be found on the CMS web site at http://www.cms.hhs.gov/CreditableCoverage. For entities with subsidiaries (including divisions, line of business, operating units, or other controlled group entities), one disclosure form can be submitted if the plan year is the same for all entities or additional forms can be submitted for each entity. On the form, the plan sponsor will list basic information including its name (not the name of the insurance carrier), federal tax identification number, address, and phone number. The plan sponsor must also specify the type of coverage, number of options offered by the entity (for example, HMO or PPO), and the creditable coverage status of the options. Also, it must provide the beginning and ending calendar dates of the plan year, the number of Part D eligible individuals expected to be covered, and an estimate of the individuals expected to be covered through any retiree plan. The plan sponsor must indicate the latest calendar date on which it provided the required disclosure notices to Part D eligible individuals.
What is unusual about the notice requirement is that the notice can only be provided electronically by filling out a disclosure form on the CMS website, which should be convenient for most plan sponsors. Disclosure forms must be filed annually. For plan years that end in 2006, the filing deadline is March 31, 2006. For plan years that end in 2007 and beyond, the filing deadline is 60 days after the first day of the plan year, ordinarily March 1st. In addition, disclosure forms must be filed within 30 days after the termination of a plan's prescription drug coverage or a change in its creditable coverage status.
It is important to note that the disclosure notice is the responsibility of the plan sponsor and not the insurance carrier. Even if an insurance carrier has indicated that the plan’s coverage is creditable, the plan sponsor (employer) must still file the required notice with CMS. When the form is submitted, we recommend that a paper copy be retained with the plan’s records together with a notation regarding the date on which the form was filed. The plan sponsor should also retain a copy of any electronic receipt notification from CMS.