Leap Day Deadline Looms – Creditable Coverage Disclosures to CMS

Written by Sheila Ninneman, J.D.

If you sponsor a calendar year group health plan that provides prescription drug coverage to Medicare Part D-eligible individuals, then you have a Leap Day deadline.  For calendar year plans, the Creditable Coverage Disclosure is due to the Centers for Medicare & Medicaid Services (CMS) by February 29, 2016.  If your group health plan is not a calendar year plan, then your Creditable Coverage Disclosure is due to CMS no later than 60 days after the beginning of your plan year.

 What Information Do You Need for the Disclosure?

  • Identify the number of prescription drug options that you offer to Medicare-eligible individuals.  For example, if your plan offers a PPO, an HMO, and an indemnity option, then you would identify three prescription drug options.
  • Determine the number of benefit options that are creditable coverage and the number that are non-creditable.   Prescription drug coverage is “creditable” if it is at least actuarially equivalent to Medicare Part D prescription drug coverage.
  • Estimate the total number of Part D-eligible individuals that you expect to have coverage under your plan at the start of the plan year (or, if both creditable and non-creditable coverage is offered, how many in each category), including active employees, retirees, disabled individuals and any of their Part D-eligible dependents, as well as anyone on COBRA who is Part D-eligible.  Note: Do not count individuals who will become Part D-eligible after the start of the plan year.
  • Determine the most recent calendar date on which the required notices of creditable or non-creditable coverage were provided.

How Do You Make the Disclosure to CMS?

You report online with the Disclosure to CMS Form at https://www.cms.gov/Medicare/Prescription-Drug-Coverage/CreditableCoverage/CCDisclosureForm.html.

Why Is the Disclosure Necessary?

If individuals do not enroll in Part D prescription drug coverage when they first become eligible, then they may be subject to late enrollment penalties if 63 consecutive days or longer passes without their having creditable prescription drug coverage.  Both CMS and potentially affected individuals need to know whether a group health plan offers drug coverage that is creditable.

What Else Should You Be Aware of? 

  • Part D – eligible individuals must be provided a notice of your plan’s creditable or non-creditable coverage prior to their initial enrollment in Part D, generally October 15.
  • New disclosure forms must be submitted to CMS within 30 days after:  (1) any change in the creditable cover status of a prescription drug plan, or (2) termination of the plan.

Any Final Thoughts?

Consult Disclosure to CMS Guidance and Instructions at https://www.cms.gov/Medicare/Prescription-Drug-Coverage/CreditableCoverage/CCDisclosure.html, before you press “Submit."

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