Reminder to Report Part D Creditability to CMS by March 1
Each year, the Centers for Medicare and Medicaid Services (CMS) requires employers to provide an update on the CMS website disclosing whether their medical plan(s) that just renewed for the new plan year have creditable or non-creditable prescription drug coverage. Instructions are provided on the site.
Most insurers or third-party administrators will inform the employer whether prescription drug coverage is creditable (i.e. provides benefits at least as comprehensive as Medicare Part D). The employer must then report this status within 60 days of the start of the new plan year (or within 30 days of a change in creditability). The purpose of this reporting to CMS is so when someone applies for Medicare Part D coverage, the person processing the person’s Medicare enrollment application can already see straight from the employer what kind of coverage the person has, saving some back-and-forth trying to confirm whether the person had creditable coverage or not.
For calendar year plans, the 60-day deadline means employers must report by March 1, 2021 (or by January 30 if creditability changed from 2020 to 2021). There is no penalty for missing the deadline.
There are a couple of limited exceptions available:
- This reporting is not required with respect to a retiree plan receiving the Medicare Retiree Drug Subsidy, as CMS is already aware of these plans.
- Also, if the prescription drug plan is not offered to anyone eligible for Medicare Part D at the beginning of the plan year (including employees, retirees, COBRA qualified beneficiaries, and any dependents), then creditability reporting is not required for that plan year. However, employers may not know for sure whether dependents might be qualified for Part D, so it may be prudent for employers that believe they have no one eligible but can’t be sure to go ahead and do the reporting.
IMA will continue to monitor regulator guidance and offer meaningful, practical, timely information.
This material should not be considered as a substitute for legal, tax and/or actuarial advice. Contact the appropriate professional counsel for such matters. These materials are not exhaustive and are subject to possible changes in applicable laws, rules, and regulations and their interpretations.