Published: Thursday, September 7, 2017 Updated: Friday, September 22, 2017
Update 09/22/17: The Medicare and You 2018 handbook is now available.
The 2018 Annual Election Period (AEP) for Medicare Part D begins October 15, 2017 and ends December 7, 2017.
The Medicare Modernization Act of 2006 provides access to prescription drug coverage to all Medicare-eligible persons under Medicare Part D. Plan sponsor notice regarding the organization’s prescription benefits must be provided to any Medicare-eligible person whether due to age or disability and is required for employees, spouses, dependents, those on Federal COBRA or New York, New Jersey, Pennsylvania, and Delaware continuation including retirees. Notice must be provided before Open Enrollment begins.
Employees will use that information to help them formulate their personal decision of whether or not they will enroll in Medicare Part D prescription coverage outside of the employer plan. This decision is critical as penalties apply when Part D is not timely in place.
Medical insurance carriers typically notify policyholders regarding the Creditable versus Non-Creditable status of the prescription coverage plan. It is the plan sponsors’ (typically the employer) responsibility to notify their groups’ members.
Please keep in mind that this determination is the employer’s responsibility when the employer is the plan sponsor. If the carrier states that the health plan is non-creditable, the benefits may still be creditable if the employer has an HRA arrangement. The employer would have to override the carrier notice. Therefore, it is the employer’s responsibility to examine all of the benefits that the employer is providing and determine the creditability of the prescription coverage. The carrier is only providing notification regarding the creditability of the coverage that the carrier provides.
In an effort to assist you when consulting with our mutual clients, Savoy has prepared a sample employer education package which you may use to communicate notification obligations to your employer plan sponsors.
This package contains the following:
- Letter from Broker Advising the Employer of Notification Responsibility
- Medicare and You 2018 Handbook
- Sample Personalized Employee Letters for Notification of Creditable and Non-Creditable Coverage:
Note: These Model Notices were issued for use on or after April 1, 2011 and are still current. Spanish versions are available at cms.hhs.gov.
Creditable Coverage Disclosure to Centers for Medicare and Medicaid Services (CMS) Most entities that currently provide prescription drug coverage to Medicare D eligible individuals (including employees, dependents, continuees, and those eligible for Medicare due to age or disability) must disclose to CMS whether or not the coverage is a creditable prescription drug coverage. The disclosure must be provided whether the entity is primary or secondary to Medicare.
Group plan sponsors should click HERE to complete the Creditable Coverage Disclosure to CMS Form online.
During the Annual Election Period (AEP), clients may also make changes to various aspects of their coverage.
- Switch from Original Medicare to Medicare Advantage, or vice versa.
- Switch from one Medicare Advantage plan to another, or from one Medicare Part D (prescription drug) plan to another.
- If they did not enroll in a Medicare Part D plan when first eligible, they can do so during the general Open Enrollment Period, although a late enrollment penalty may apply.
To enroll in a Medicare Advantage plan, some basic criteria must be satisfied:
- Must be enrolled in Medicare Part A and B.
- Must live in the plan’s service area.
- Cannot have End-Stage Renal Disease (some exceptions apply).
Is auto-renewal available? For those already enrolled in a Medicare Part D or Medicare Advantage Plan who do not want to make changes to their coverage for 2018, they do not need to do anything during AEP, assuming the current plan will still be available in 2018. If the plan is being discontinued and is not eligible for renewal, they will receive a non-renewal notice from the carrier prior to AEP. These individuals will have an extended enrollment period through February 28, 2018.