Prescription Drug Notices
Does your company's health plan provide prescription drug coverage? If so, you have until October 15, 2023 to send a notice to individuals who are enrolled in Medicare Part A or Part B and are eligible for the company's health plan. The notice lets recipients know whether the company's prescription drug coverage is "creditable" or "non-creditable."
Prescription drug coverage is "creditable" if the actuarial value of the coverage equals or exceeds the actuarial value of standard Medicare Part D prescription drug coverage. Your company's carrier or third-party administrator will generally be able to tell you whether the coverage is creditable. The purpose of this notice is to help Medicare-eligible individuals determine whether to enroll in Medicare Part D prescription drug coverage during Medicare's annual open enrollment period, which runs from October 15 to December 7.
It can be difficult to identify all of the individuals who need to receive the notice. For example, while a company can probably identify the active employees who are eligible for Medicare on account of age or disability, the company probably does not know whether employees' spouses or dependents are enrolled in Medicare on account of disability. Accordingly, we recommend sending the notice to everyone enrolled in the company's health plan and to all employees who are eligible for the company's health plan.
The Centers for Medicare and Medicaid Services (CMS) has issued model notices that may be used for this purpose. The model notices can be downloaded from the CMS website here. Please contact us if you need assistance tailoring the model notice for your plan.
Also Note: The notice described above is different from the creditable (or non-creditable) coverage disclosure that is made directly to CMS. The disclosure to CMS is made by completing and submitting an online form within 60 days after the first day of the plan year. For a calendar-year plan that provides prescription drug coverage, the next disclosure to CMS is due by February 29, 2024.
For calendar-year employee benefit plans governed by ERISA, the general deadline for filing a Form 5500 was July 31, 2023. However, if a Form 5558 (Application for Extension of Time) was filed for the plan by July 31, the deadline is automatically extended until October 15, 2023. 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 working with service providers or accountants to complete your Form 5500s.
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If you have questions or concerns regarding this client alert, please contact the authors, any member of Venable's Employee Benefits and Executive Compensation Practice Group, or your regular Venable lawyer.