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Upcoming Compliance Deadline for Group Health Plans
With the start of the new year on January 1, 2024, many group health plans also ushered in a new benefit Plan Year. For those group health plans who use a calendar Plan Year (i.e., your Plan Year begins on January 1 and ends on December 31), it is nearly time to make your annual disclosure regarding your prescription drug coverage to the Centers for Medicare & Medicaid Services (CMS).
Who is required to complete the disclosure?
Generally speaking, if your organization sponsors or maintains a group health plan that provides prescription drug coverage to individuals who are eligible for Medicare Part D, you will be required to complete the disclosure.
If your organization falls into one of the categories listed in the federal regulations (at 42 C.F.R. § 423.56(b)), then you are required to complete the disclosure to CMS at least annually, unless you meet one of the exclusions in the regulations (at 42 C.F.R. § 423.56(e)). For example, most organizations that provide group employee health coverage and/or qualified retiree prescription drug benefits are required to complete the disclosure, while certain cost-based HMO plans are exempt from disclosure requirements. Disclosure is required even if your plan’s coverage is secondary to Medicare.
What must my plan disclose?
Disclosure to CMS involves certifying that your plan’s prescription drug coverage is at least as good, actuarially speaking, as the standard coverage offered by Medicare. While this may seem difficult to quantify (and it is!), CMS provides a general basis against which you can measure your plan’s coverage to determine whether it is creditable. Specifically, the CMS actuarial guidelines note that a plan must measure “whether the expected amount of paid claims under the entity’s prescription drug coverage is at least as much as the expected amount of paid claims under the standard Medicare prescription drug benefit.” Practically speaking, this means that your plan should be expected to pay out at least as much as the standard Medicare prescription drug coverage will pay.
When must my disclosure be completed?
The general rule is that your plan’s disclosure must be complete and submitted within 60 days of the start of your Plan Year. For example, if you represent a group health plan whose Plan Year began on January 1, 2024, you must complete your disclosure no later than March 1, 2024. Please note, this date is a bit different than most years! With the leap day in February 2024, this deadline is earlier than it normally would be. If you have any questions regarding whether your prescription drug coverage is creditable, be sure to reach out to your trusted employee benefits legal counsel.
You can access the form to complete your disclosure to CMS here: https://surveys.cms.gov/jfe/form/SV_6ilHtZUoAtl92n4
Sources:
1.For a general overview, see CMS’s published guidance on the creditable coverage disclosure, available at https://www.cms.gov/medicare/prescription-drug-coverage/creditablecoverage/downloads/2009-06-29_ccdisclosure2cmsupdatedguidance.pdf (the “Guide”).
2. See, for example, 42 C.F.R. § 423.56(b)(3).
3. See 42 C.F.R. § 423.56(e).
4. 70 Fed. Reg. 4225(II)(F)(3) (2005).
5. See item 2, on page 3 of the Guide.
Who is required to complete the disclosure?
Generally speaking, if your organization sponsors or maintains a group health plan that provides prescription drug coverage to individuals who are eligible for Medicare Part D, you will be required to complete the disclosure.
If your organization falls into one of the categories listed in the federal regulations (at 42 C.F.R. § 423.56(b)), then you are required to complete the disclosure to CMS at least annually, unless you meet one of the exclusions in the regulations (at 42 C.F.R. § 423.56(e)). For example, most organizations that provide group employee health coverage and/or qualified retiree prescription drug benefits are required to complete the disclosure, while certain cost-based HMO plans are exempt from disclosure requirements. Disclosure is required even if your plan’s coverage is secondary to Medicare.
What must my plan disclose?
Disclosure to CMS involves certifying that your plan’s prescription drug coverage is at least as good, actuarially speaking, as the standard coverage offered by Medicare. While this may seem difficult to quantify (and it is!), CMS provides a general basis against which you can measure your plan’s coverage to determine whether it is creditable. Specifically, the CMS actuarial guidelines note that a plan must measure “whether the expected amount of paid claims under the entity’s prescription drug coverage is at least as much as the expected amount of paid claims under the standard Medicare prescription drug benefit.” Practically speaking, this means that your plan should be expected to pay out at least as much as the standard Medicare prescription drug coverage will pay.
When must my disclosure be completed?
The general rule is that your plan’s disclosure must be complete and submitted within 60 days of the start of your Plan Year. For example, if you represent a group health plan whose Plan Year began on January 1, 2024, you must complete your disclosure no later than March 1, 2024. Please note, this date is a bit different than most years! With the leap day in February 2024, this deadline is earlier than it normally would be. If you have any questions regarding whether your prescription drug coverage is creditable, be sure to reach out to your trusted employee benefits legal counsel.
You can access the form to complete your disclosure to CMS here: https://surveys.cms.gov/jfe/form/SV_6ilHtZUoAtl92n4
Sources:
1.For a general overview, see CMS’s published guidance on the creditable coverage disclosure, available at https://www.cms.gov/medicare/prescription-drug-coverage/creditablecoverage/downloads/2009-06-29_ccdisclosure2cmsupdatedguidance.pdf (the “Guide”).
2. See, for example, 42 C.F.R. § 423.56(b)(3).
3. See 42 C.F.R. § 423.56(e).
4. 70 Fed. Reg. 4225(II)(F)(3) (2005).
5. See item 2, on page 3 of the Guide.
