The following outlines your responsibilities to be in compliance with the Medicare Prescription Drug, Improvement and Modernization Act of 2003. Many employers have already sent the Medicare Part D notice out during open enrollment. If you haven’t, please make sure to send the notice before October 15.

The MMA made changes to the existing Medicare program and created a voluntary prescription drug program, called Medicare Part D, for Medicare eligible individuals.

Action Item: Entities whose policies include prescription drug coverage are required to advise all Medicare eligible employees, retirees and covered dependents on an annual basis whether or not their group health plan’s prescription benefit is creditable (at least as good as Medicare Part D) or not-creditable (not as good as Medicare Part D).

Compliance Deadline: It's recommended you notify your employees every open enrollment with a deadline of October 15. If your plan renews after October 15, we recommend you distribute the letter by October 1, and if your plan’s status as creditable or non-creditable coverage changes on your November or December renewal, you distribute a new notice that accurately reflects your plan’s current status.

Creditable Coverage Determination: Coverage is creditable if the actuarial value of the coverage equals or exceeds the actuarial value of standard prescription drug coverage under Medicare Part D, as demonstrated through the use of generally accepted actuarial principles and in accordance with the CMS actuarial guidelines.

In general, the actuarial equivalence test measures whether the expected amount of paid claims under the plan sponsor’s prescription drug coverage is at least as much as the expected amount of paid claims under the standard Part D benefit. Plans with multiple benefit options must apply the actuarial value test for each benefit option.

Click here to download a copy of the Creditable Coverage Simplified Determination Form from the CMS website.

Content of Disclosure Notices: CMS has provided Model Disclosure Notices for plan sponsors to use when disclosing their creditable coverage status to Medicare beneficiaries. Click here to download a PDF copy of the Model Disclosure Notices from the CMS website.

For your convenience, we're providing the Model Disclosure Notice Templates in Microsoft Word format for you to complete the appropriate version.

Form and Manner of Delivering Disclosure Notices: An entity may deliver a Creditable Coverage Disclosure Notice to plan participants in one of two formats, either hard copy or electronically. Notices may only be sent electronically to those participants and their Medicare beneficiaries who have the ability to access electronic documents at their regular place of work if they have access to the entity’s electronic information system on a daily basis as part of their work duties. The notice must be posted to the entity’s internal website, if applicable, with a link to the notice on the entity’s internal homepage.

Information contained herein is not intended to constitute tax or legal advice and should not be used for purposes of evading or avoiding otherwise applicable regulatory responsibilities as issued by the federal or state government(s) and/or taxes owed under the Internal Revenue Code. You are encouraged to seek advice from your legal or tax advisor based on your circumstances.