Information updated 10/01/2024
The following information provided by QualChoice regarding Medicare Part D is for informational purposes only and should not be considered legal advice. If you have questions about your obligations under Medicare Part D, please consult your attorney or benefits consultant.
QUALCHOICE EMPLOYER GROUPS
Action Required Before October 15 Each Year
Subsidized prescription drug coverage became available to Medicare beneficiaries in 2006 through the Medicare Part D program. Under this program, there are certain requirements placed on employers that provide prescription drug coverage to retirees and/or to Medicare-eligible individuals. This notification is intended to provide you with information about those obligations.
The employer’s obligations are:
Determine whether your prescription drug plan provides “creditable coverage” in 2025, that is, the coverage is expected to pay on average as much as the standard prescription drug coverage under Medicare Part D.
QualChoice has determined that, based on the information available, most health plans that include prescription drug coverage administered by QualChoice are “creditable coverage”. However, the prescription drug coverage in the following plans is not "creditable coverage," when it is a family policy (no matter if Medicare is primary or secondary) or a subscriber only policy and Medicare is primary.
ARP0292, ARP2137
In addition, the prescription drug coverage in the following plans is not "creditable coverage," when it is a family policy and Medicare is primary.
ARP0156, ARP0159, ARP0208, ARP0231, ARP0232, ARP0263, ARP0493, ARP2087, ARP2118, ARP2168, ARPG305, ARQ0018, ARQ0019, ARQ0028, ARQ0029, ARQ0071, ARQ0158, ARQ2004, ARQ2020, ARQG305
Furthermore, the prescription drug coverage in the following plans are not "creditable coverage," but only when Medicare coverage is primary:
ARP0197, ARP0233, ARP0240, ARP0264, ARP0265, ARP0304, ARP0425, ARP0437, ARP0453, ARP0481, ARP0497, ARP0501, ARP2103, ARP2125, ARPB303, ARPS305, ARPS307, ARPS304, ARPS309, ARQ0032, ARQ0040, ARQ0097, ARQ0120, ARQ0142, ARQ0144, ARQ0152, ARQ0153, ARQ0163, ARQB303. ARQB503, ARQL011, ARQS305, ARQS306, ARQS307, ARQS505, ARQS507, ARQS509
You should still review your organization’s plan to confirm whether the prescription benefits provided are or are not “creditable coverage.”
Medicare has provided a simplified method for employers that are not applying for the Retiree Drug Subsidy to determine whether a prescription drug plan’s coverage is creditable. Specifically, a prescription drug plan that meets the following requirements is deemed to be “creditable coverage”:
a. It provides coverage for brand and generic prescriptions;
b. It provides reasonable access to retail providers;
c. It is designed to pay, on average, at least 60% of a participant’s prescription-drug expenses; and
d. It meets one of the following:
- A stand-alone prescription-drug plan satisfies at least one of the following:
- Prescription-drug coverage has no annual benefit maximum or a maximum annual benefit payable by the plan of at least $25,000; or
- Prescription-drug coverage has an actuarial expectation that the amount payable by the plan will be at least $2,000 annually per Medicare eligible individual; OR
- A prescription-drug plan that is integrated with other healthcare benefits (e.g., medical, dental, vision, etc.) has no more than a $250 deductible per year, has no annual benefit maximum or a maximum annual benefit payable by the plan of at least $25,000 and has no less than a $1 million lifetime combined benefit maximum.
Once you have determined whether your organization’s prescription drug plan is “creditable coverage,” you must notify your Medicare-eligible members before October 15 of each year as to whether your prescription drug coverage is creditable.
A Medicare Part D-eligible member is someone who: (i) is entitled to Medicare benefits under Part A or enrolled in Medicare Part B and (ii) lives in the service area of a Part D plan.
If the coverage is creditable, you should notify your Medicare-eligible members of your determination by mailing a CMS-approved model notice titled “Model Individual Creditable Coverage Disclosure Notice Language” to them. A Model Individual Creditable Coverage Disclosure Notice is available on the CMS.gov website. You will need to insert the name of your organization in the spaces provided.
If the coverage is not creditable, you should notify your Medicare-eligible members of your determination by mailing the CMS model notice titled “Model Individual Non-Creditable Coverage Disclosure Notice Language." Visit CMS.gov for a Model Individual Non-Creditable Coverage Disclosure Notice. You will need to insert the name of your organization in the spaces provided.
You must also notify CMS annually of your determination of whether your prescription drug plan is “creditable coverage.” This notification should be done electronically through CMS’s website. Visit CMS.gov to access the web registration form.
The CMS website contains additional information and guidance on Medicare Part D and your obligations as an employer and may be a good resource for you.
We hope that this information has been helpful to you.
QCA24-AR-H-393