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Annual CMS Medicare Part D Disclosure Due for Calendar-Year Plans

February 10, 2020


Reporting Creditable or Non-Creditable Status to CMS

As part of the annual notification requirements under the Medicare Modernization Act (MMA), employer-sponsored group health plans that provide prescription drug coverage are required to disclose the plan’s creditable or non-creditable coverage status to the Centers for Medicare & Medicaid Services (CMS). This online disclosure is due sixty (60) days after the first day of each plan year, and for calendar year plans it should be made by February 29, 2020 (but see Timing of the Disclosure to CMS Form below).

This alert provides a summary of the Medicare Part D disclosure requirements including a review of:

If you have any questions or need further details about the creditable coverage disclosure requirements, please contact your client service team.

Employers Subject to Medicare Part D Disclosure

Employers who offer group health plans with prescription drug coverage that cover Medicare eligible employees, retirees, spouses, or dependents are subject to the Medicare Part D disclosure (and notification[1]) requirements. The disclosure is required whether the coverage is primary or secondary to Medicare.

A Safe Assumption – If you are an employer sponsoring a group health plan with prescription drug coverage, this disclosure requirement likely applies to you.

Timing of the Disclosure to CMS Form

There are three events which trigger submission of the disclosure. The disclosure must be completed:

  1. Within sixty (60) days after the first day of the plan year (this is February 29, 2020 for calendar-year plans, but this falls on a Saturday and CMS will likely accept a filing by March 2, 2020 as timely);
  2. Within thirty (30) days of a mid-year change in the prescription drug plan’s status (from creditable to non-creditable or vice versa); and
  3. Within thirty (30) days of the termination of the plan.

Believe It or Not:  There are no enforcement penalties or sanctions for failing to timely file this disclosure with CMS or even for failing to file it at all.  We do recommend applicable employers complete this filing, but it’s little surprise that non-compliance is high.

The General Contents of the Disclosure to CMS Form

Employers sponsoring at least one prescription drug plan in which a Medicare eligible individual is enrolled (or could be enrolled), are required to complete the online disclosure. No other filing methods are allowed.

The contents of the disclosure include:

  • General employer information – Employers should report using the name and federal ID number (EIN) of the plan sponsor. If multiple employers within a controlled group are covered under the same plan, the EIN for the parent company (or other entity if it is the plan sponsor) may be used. If each individual entity reports separately, each should report using its own EIN. The EIN of the insurance carrier or third party administrator should not be used.
  • The type of coverage (“Group Health Plan: Employer Sponsored Plan”).
  • Plan option information – Employers must report the number of prescription drug options offered and the creditable or non-creditable coverage status for each.[2] This is based on the number of group health plan options offered with different prescription drug benefits.
  • The estimated number of Medicare Part D individuals covered under each plan.

How Accurate Do I Have to Be? CMS will accept a reasonable estimate of how many Medicare eligible individuals are covered. Remember that individuals can be Medicare eligible based on age, disability, or end-stage renal disease.

  • The most recent date (MM/DD/YYYY) that the required annual creditable or non-creditable Medicare Part D Notice was distributed to participants

Available CMS Guidance and Instructions CMS provides instructions in its Creditable Coverage Disclosure to CMS Form Instructions and Screen Shots. Information regarding the creditable coverage requirements under the Medicare Prescription Drug, Improvement, and Modernization Act is available on the CMS website.

[1]Distributing Medicare Part D notices is a separate employer responsibility in which the employer notifies the participants of the creditable status of the drug plan(s).

[2] Employers should exclude options receiving a Medicare retiree drug subsidy.

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Construction Executive Magazine Shares Insight from Leaders in Surety Bonding

November 18, 2019


Construction Executive Magazine asked several leaders in surety bonding about the risks involved when bidding on projects outside their niche during an economic downturn. Read their responses here.

Here is what Andy Thome, President of J.W. Terrill, a Marsh & McLennan Agency in St. Louis, had to say: 

When branching out to geographies or niches outside of your core discipline, proceeding with caution is the best approach.

For example, after the 2008 financial meltdown, there was a significant flight to federal work. The government speaks a unique language and operates in a world known as FAR (Federal Acquisition Regulations). While transparency abounds, FAR rules are substantially “different” than those in the private sector. Many contractors underestimated the backroom demands and utilized their “go-to” subcontractors, which were also new to the process. Contractors that chose to engage with a government contracting specialist performed better than those that didn’t, but few of the general contractors that dove into the government sector have stayed the course.

In another instance, multi-family and senior living facilities have been a hot market for years. While many contractors have performed well, several problems arise when general contractors utilize “residential plus” subcontractors versus commercial light subcontractors. Depending on the plans, owner and geography, the quality of the building envelope system has been an ongoing source of concern. Construction defect (CD) litigation is on the rise, and negotiating an equitable contract that has proper contract “hygiene” can be crucial to a project’s success.

Challenging your team to talk through the risks associated with a new opportunity is a great way to vet the project. Including your surety agent and insurance professional in the discussion (if you feel they are qualified to have a seat at the table) puts you in the best possible position to make sound decisions as you endeavor to move into a new niche or region.

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