Health plans that offer prescription drug coverage to their
Medicare-eligible employees, retirees, and dependents must notify them
by October 15, as to whether that coverage is "creditable" or
"non-creditable."
This requirement is part of the Medicare Prescription Drug, Improvement
and Modernization Act of 2003 (MMA), which added a new prescription drug
program to Medicare known as the Part D drug benefit. Under the MMA, the
Centers for Medicare & Medicaid Services (CMS) established two
categories of prescription drug coverage – creditable and non-creditable
coverage. Creditable coverage is defined as a prescription drug benefit
that has an actuarial value as good as or better than the standard Part
D drug benefit. A non-creditable prescription drug plan has an actuarial
value that is not as good as the standard Part D drug benefit.
NOTIFICATION IS REQUIRED
Plan sponsors (employer groups/health and welfare funds) that provide
prescription drug coverage to Medicare-eligible active employees,
retirees, and dependents must disclose to them by October 15 of each
year, whether the drug coverage they offer is creditable or
non-creditable.
WHAT EMPLOYERS SHOULD DO
Determine whether their prescription drug coverage is creditable or
non-creditable;
Disclose to their Medicare-eligible members (employees and their
dependents) whether their prescription drug coverage is creditable or
non-creditable prior to the Medicare Part D Annual Election period:
Notify CMS whether their prescription drug coverage qualifies as
creditable or non-creditable;
Visit the CMS website for additional information and required
documentation;
A Word version of the Creditable Coverage Model Notice is available
here and the Non-Creditable Coverage Model Notice is
here.
Please note: Medicare beneficiaries who are not covered under
creditable prescription drug coverage and who chose not to enroll in a
Medicare Part D drug plan when they first became eligible for Medicare
or during the initial enrollment period, will likely pay a higher
premium permanently if they subsequently enroll in the Medicare Part D
drug program (the premium is increased by 1 percent for each month
without creditable coverage).
Carrier Links to Creditable/Non-Creditable Lists;
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AmeriHealth
