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Creditable Coverage

The Medicare Modernization Act (MMA) 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:

1.     Provide a written disclosure notice to all Medicare eligible individuals annually who are covered under your prescription drug plan, prior to October 15th each year and at various times as stated in the regulations.  This should also be provided to a Medicare eligible individual when he/she joins the plan. This disclosure must be provided to the following:

·         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

·         any retirees and their dependents.

There may be 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 that can be imposed by the MMA. This information is necessary for an individual's decision whether to enroll in a Medicare Part D prescription drug plan. For more information download the “Creditable Coverage Disclosure to CMS Guidance” and / or “Creditable Coverage Disclosure to CMS Instructions and Screen Shots”.

2.     Complete the Online Disclosure to CMS Form to report the creditable coverage status of your prescription drug plan. The Disclosure should be completed every year, 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. For more information click on the following link: “Disclosure to CMS Form”.

For your convenience, we are providing Model Disclosure Notices for both Creditable and NON-Creditable Coverages.

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