Reminder: CMS Medicare Part D reporting due Feb. 29, 2024 for calendar year plans

It’s not a typo: the deadline to report to the Centers for Medicare and Medicaid Services (CMS) is Feb. 29, instead of March 1, due to 2024 being a leap year.

Note: the Feb. 29 deadline is for calendar year plans only. For non-calendar year plans, the reporting due date is 60 days after the beginning of the plan year.

Employers offering group health plans that include prescription drug coverage for individuals eligible for Medicare Part D coverage must annually inform CMS regarding the creditable or non-creditable status of the prescription drug coverage. For a plan to be deemed creditable, its drug coverage must be at least actuarially equivalent to Medicare Part D prescription drug coverage.

This reporting obligation encompasses both self-funded and fully insured group health plans, and it is mandatory, regardless of whether the prescription drug coverage functions as the primary or secondary option alongside Medicare. The disclosure must be provided to CMS:

  • Within 60 days after the beginning of the plan year

  • Within 30 days after termination of the prescription drug plan

  • Within 30 days after any change in creditable status of the prescription drug plan

Completing the disclosure to CMS form

Reporting must be completed online through the disclosure to CMS form (opens a new window). Before completing the form, plan sponsors are encouraged to consult the instructions (opens a new window) provided by CMS. Key areas include:

Entities with subsidiaries: A single disclosure to CMS form can be submitted for entities with subsidiaries if the plan year is the same for all subsidiaries. If all entities are covered under the same type of coverage, use the parent company’s Federal Tax EIN.

Number of options offered: This is the total number of benefit options under the employer’s plan, such as HMO, PPO, or HDHP, minus benefit options that the entity claims under the retiree drug subsidy program.

Creditable coverage status: If all options are either creditable or non-creditable, aggregate data may be provided for all options. If some options are creditable and others are non-creditable, the data may be divided into two groups.

Number of Part D eligible individuals: Employers must estimate how many Part D-eligible individuals they expect to cover as of the first day of the plan year, excluding any retiree drug subsidy participants. This includes active employees, retirees, disabled individuals, dependents, or individuals on COBRA (Carriers, TPAs and PBMs may be able to assist with the estimate).

Disclosure to plan participants

Plan sponsors must issue the Medicare Part D Creditable or Non-Creditable Notice to all Part D-eligible individuals covered by or applying for an employer's prescription drug benefits plan. This requirement extends to Medicare beneficiaries who are both active employees and retirees, as well as those Medicare beneficiaries covered as spouses and dependent children under either active or retiree coverage. This disclosure requirement’s purpose is to inform plan participants that they will have to pay a higher Part D premium if they do not enroll in Part D when first eligible to do so, unless they have creditable coverage through another plan and enroll in Part D within 63 days of the loss of the creditable coverage.

  • The disclosure to plan participants is required at the following times:

  • Prior to the annual Part D enrollment window, which opens each Oct. 15

  • Prior to the individual’s personal initial enrollment period (IEP) for Part D

  • Prior to enrollment in the employer’s plan

  • Whenever the plan ceases to provide drug coverage or the creditable nature of the coverage changes

  • Upon request by the Medicare-eligible individual

Lockton comment: For purposes of the first and second bullets above, a plan only needs to provide the notice once every 12 months. Lockton recommends including the creditable or non-creditable notice in the employee annual open enrollment benefit packet and new hire benefit packet. Doing so takes care of the first three bullets above. Because most plans don’t know who their Medicare-eligible members are, especially regarding dependents, distributing the notices to all enrolling and enrolled employees and retirees is highly recommended.

Plans exempt from the filing process

Group medical plans that do not offer drug coverage to any Medicare-enrolled employee, retiree, or dependent at the beginning of the plan year are exempt from filing. Similarly, employers who qualified for the Medicare Part D retiree drug subsidy are exempt from filing with CMS., However, this exemption only applies to the individuals and plan options for which the subsidy was claimed. If an employer offers prescription drug coverage to any Medicare-enrolled retirees or dependents not claimed under the subsidy, the employer must complete an online disclosure for plan options covering such individuals.

Lockton comment: As the exemptions are limited, plan sponsors should complete the CMS filing to the best of their ability, even if they suspect, but are not sure, that their plan is exempt from filing.

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