Medicare Part D Notice to Individuals
If your group health plan provides prescription drug coverage to Medicare-eligible individuals, you have until October 15 to send a Creditable Coverage Notice before the start of the 2022 annual open enrollment period for Medicare Part D prescription drug coverage, which runs from October 15 through December 7.
Under the Medicare rules, employers offering prescription drug coverage must send an annual Creditable Coverage Notice to Medicare beneficiaries no later than October 15 of each year, stating whether the coverage they offer under their plans is "creditable" against the prescription drug coverage that is offered under Part D of the Medicare Program. As a general rule, an employer's prescription drug coverage is "creditable" against Medicare Part D coverage if the actuarial value of the employer's prescription drug coverage equals or exceeds the actuarial value of standard Medicare prescription drug coverage.
The purpose of this required notice is to help Medicare beneficiaries determine whether they should elect Medicare Part D during its annual election period. We understand that it may be difficult to identify all of the Medicare beneficiaries benefiting under an employer's prescription drug coverage, because Medicare can cover active employees, disabled employees, employees on COBRA, retirees, and beneficiaries who are covered as spouses or dependents through an active employee. Therefore, we recommend sending the notice to all covered participants and their dependents.
The Centers for Medicare and Medicaid Services (CMS) has issued model notices that may be used by employers for this purpose. The model notices can be downloaded from the CMS website here. Please contact us for assistance if you are tailoring the model notice for your plan.
Reminder: Next year, within 60 days after the beginning of the plan year for calendar-year plans, employers also have to provide a notice directly to the Centers for Medicare & Medicaid Services (CMS) about whether their prescription drug coverage is creditable against Medicare Part D coverage.
Extended Form 5500 for ERISA Plans
The 2020 Form 5500 filing deadline for calendar-year employee benefit plans governed by ERISA is July 31. However, employers that filed a Form 5558 extension by July 31 have until October 15 to file a Form 5500 for the 2020 plan year. Instructions for completing and filing the Form 5500 are located on the Department of Labor website here. Please let us know if you need assistance in completing your Forms 5500 with plan providers and accountants.
Questions? If you have questions or concerns regarding this client alert, please contact the authors, any member of Venable's Employee Benefits and Executive Compensation Group, or your regular Venable lawyer.