Medicare Creditable Coverage Disclosure Requirements

Creditable Coverage

The Medicare Modernization Act (MMA) (enacted in 2003) requires entities (whose policies include prescription drug coverage) to notify Medicare eligible policyholders whether their prescription drug coverage is creditable coverage, which means that the coverage is expected to pay on average as much as the standard Medicare prescription drug coverage. For these entities, there are two disclosure requirements.

Disclosure Requirement #1

The first disclosure requirement is to provide a written disclosure notice (aka “Medicare D Determination Notice”) to all Medicare eligible individuals annually who are covered under its prescription drug plan, prior to October 15th each year and at various times as stated in the regulations, including to a Medicare eligible individual when he/she joins the plan. This disclosure must be provided to Medicare eligible active working individuals and their dependents, Medicare eligible COBRA individuals and their dependents, Medicare eligible disabled individuals covered under your prescription drug plan and any retirees and their dependents. This disclosure is required whether the entity's coverage is primary or secondary to Medicare.

The MMA imposes a late enrollment penalty on individuals who do not maintain creditable coverage for a period of 63 days or longer following their initial enrollment period for the Medicare prescription drug benefit. Accordingly, this information is essential to an individual's decision whether to enroll in a Medicare Part D prescription drug plan.

Disclosure Requirement #2

The second disclosure requirement is for entities to complete the Online Disclosure to CMS Form to report the creditable coverage status of their prescription drug plan. The Disclosure should be completed annually no later than 60 days from the beginning of a plan year (contract year, renewal year), within 30 days after termination of a prescription drug plan, or within 30 days after any change in creditable coverage status. This requirement does not pertain to the Medicare beneficiaries for whom entities are receiving the Retiree Drug Subsidy (RDS).

Note: If an entity does not offer outpatient prescription drug benefits to any Medicare Part D eligible individuals on the beginning date of their plan year (renewal year, contract year, etc.), the entity is not required to complete the Disclosure to CMS on-line form for that plan year.

Regional Care, Inc. (RCI) Responsibilities

RCI will assist our clients with the Disclosure Requirement #1 in the following ways:

  • RCI will perform the testing with the applicable PBM to determine if a plan is creditable or non-creditable.
  • RCI will mail out the Medicare D Determination Notice (either a creditable or non-creditable notice) to each employee at the time of enrollment (if requested by the employer).
  • RCI will provide the employer with copies of the Medicare D Determination Notice for the employer to hand out in order to fulfill the annual distribution requirement (if requested by the employer).
  • RCI will provide the employer with any assistance needed to complete the Disclosure Requirement #2 (if requested by the employer).

Employer Responsibilities

Employers will be responsible for fulfilling the Disclosure Requirement #2. All disclosures are to be done on-line through the CMS website and must be done annually.

All information can be found at the following address, including the Online Disclosure to CMS Form and instructions:

How Can I Get More Information?

For additional information, you can contact your Account Manager at (308) 635-2260 or toll free at (800) 795-7772.