Beginning this year, employers[*] must provide Medicare Part D notices prior to October 15 due to changes made as part of the Patient Protection and Affordable Care Act of 2010 (PPACA). Each year, employers that provide prescription drug coverage are required to provide Medicare-eligible participants with notices of creditable or non-creditable coverage regarding their prescription drug coverage. This Medicare Part D annual notice is required to be provided prior to the annual enrollment period for Medicare Part D (Medicare's prescription drug coverage program). Among the many changes instituted by PPACA, the annual enrollment period for Medicare Part D plans was moved forward from November 15 (through December 31) to October 15 (through December 15). As a result, beginning this year, employers providing prescription drug benefits to Medicare-eligible participants must disclose to those participants whether their prescription drug coverage is creditable or non-creditable prior to October 15. Previously, these notices had to be provided each year prior to November 15.
Creditable coverage is coverage that pays as much as or more than the standard Medicare Part D prescription drug plan, and participants with such coverage can enroll in Medicare Part D plans after the initial enrollment period without premium penalties. Non-creditable coverage is coverage that pays less than the standard Medicare Part D prescription drug plan, and participants with such coverage may still enroll in Medicare Part D plans but may face significant premium penalties if enrolling after the initial enrollment period. Due, in part, to this potential of premium penalties, employers have been tasked, by law, with notifying their Medicare-eligible prescription drug plan participants as to whether their prescription drug coverage is creditable.
WHAT EMPLOYERS SHOULD DO NOW
The practical effect of moving the start of the Medicare Part D annual enrollment period to October 15 is the acceleration of the planning process associated with delivering these creditable and non-creditable coverage notices. Employers should begin planning now for this shortened timetable by: (1) determining whether coverage for the upcoming year is creditable or non-creditable, and (2) preparing the notices of creditable and/or non-creditable coverage. While many employers are accustomed to delivering these creditable and non-creditable coverage notices with their open enrollment materials, the new October 15 deadline will require such employers to consider separately delivering the creditable and non-creditable coverage notices before other open enrollment materials or, alternatively, moving up their entire open enrollment schedule.