United States: Group Health Plan Sponsors Required To Submit Annual Disclosure Form

The Centers for Medicare & Medicaid Services (CMS) has released new guidance (please see http://www.cms.hhs.gov/CreditableCoverage/) regarding an employer’s disclosure obligations to CMS under the new Medicare Part D regulations. Group health plans sponsors providing prescription drug benefits must submit an annual disclosure form to CMS providing basic information about the plan and whether prescription drug coverage offered under the plan is creditable coverage. For plan years ending in 2006, the deadline for submission is March 31, 2006.

Medicare Part D regulations issued by CMS require employer-sponsored group health plans and most other entities providing prescription drug coverage to Medicare Part D eligible individuals to disclose whether the coverage is "creditable coverage." A group health plan’s prescription drug coverage is creditable if the actuarial value of the coverage is equal to or better than the actuarial value of standard Medicare Part D coverage. The new CMS guidance generally requires group health plan sponsors to submit a disclosure form for all group health plans. However, group health plan sponsors are not required to submit the disclosure form for group health plans that have been approved for the retiree drug subsidy.

Group health plan sponsors must complete and submit the creditable coverage disclosure form electronically via the CMS website (see http://www.cms.hhs.gov/CreditableCoverage/). Currently, there are no other methods for providing the notice.

A creditable coverage disclosure must be filed with CMS on an annual basis. For all group health plans with plan years ending in 2006, the initial disclosure form must be submitted no later than March 31, 2006. For subsequent plan years, the disclosure form must be provided within 60 days after the first day of the plan year. The plan sponsor must report the beginning date and ending date for the plan year on each disclosure notice. In addition, a group health plan sponsor must file an amended disclosure form with CMS within 30 days after the termination of the plan or any change in the creditable coverage status of the prescription drug coverage provided under the plan (such as the termination of any prescription drug option).

The disclosure form requests the following information from plan sponsors:

• Plan sponsor name, employer identification number, address and phone number

• Number of prescription drug options offered under the plan in the same plan year (for example, if an employer group health plan offers an HMO option, a PPO option and an indemnity option, each of which provides prescription drug coverage, then the plan sponsor would report three prescription drug options)

• Aggregated creditable or aggregated non-creditable coverage and information about the Part D eligible individuals expected to be covered

• Date the annual creditable coverage disclosure notice was provided to Part D eligible individuals

• Effective date of the change and the date the change was disclosed to Part D eligible individuals if the disclosure notice is being filed to report a change in creditable coverage status

• Name, title, and e-mail address of the authorized individual completing the form for the plan sponsor (someone employed by the plan sponsor)

The benefits lawyers at McDermott are uniquely qualified to assist you in complying with your Medicare Part D disclosure obligations as well as other issues associated with the Medicare Part D prescription drug benefit.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.