On April 1, 2011, the Centers for Medicare and Medicaid Services (CMS) issued revised Medicare Part D creditable and non-creditable coverage notices to reflect an amendment made to the Social Security Act by the Affordable Care Act (ACA). The amendment accelerated the Medicare Part D annual enrollment period - from November 15 through December 31, to October 15 through December 7. This change is effective for 2012 Part D enrollments, occurring in the fall of 2011. Consequently, references to the November 15 through December 31 annual enrollment period in most plan sponsors' Medicare notices of creditable (or non-creditable) coverage are now inaccurate.
By way of background, the Medicare Modernization Act of 2003 (MMA) requires group health plans providing any prescription drug coverage to notify their Medicare Part D eligible participants as to whether the plan's prescription drug coverage is "creditable." This means that the coverage is expected to pay, on average, as much as the standard Medicare prescription drug coverage. The MMA imposes a late enrollment penalty on individuals who experience a 63-day (or longer) gap in creditable coverage before enrolling in the Medicare Part D prescription drug benefit. Accordingly, this information concerning an employer plan's "creditable" status is essential to an individual's decision whether - and when - to enroll in Part D of Medicare.
Plan sponsors must notify their Part D eligible participants as to whether the plan's prescription drug coverage is creditable or non-creditable prior to the start of the Medicare Part D annual enrollment period. Although CMS has issued revised model notices reflecting the change in this enrollment period, it has not yet issued updated guidance on this topic. Nevertheless, plan sponsors should update their notices to reflect the new Medicare Part D annual enrollment period, and they should expect that future guidance will require the notices to be provided by October 15, 2011, instead of November 15, 2011.
Chadron J. Patton, Associate
Spencer Fane Britt & Browne LLP