When Congress established the Medicare Part D program, federal law added a rule requiring that employers distribute notices to Part D-eligible individuals explaining the creditable coverage status of their employer's prescription drug benefits. That notice is intended to communicate whether or not the plan's prescription drug coverage is considered "creditable" as measured against Medicare's Part D regular prescription drug benefit. Why does the employer plan's creditable status matter? Creditable status is important because Medicare rules generally require that eligible individuals enroll when they are first eligible. If such a person enrolls at a later date and experiences a significant break in coverage (measured as longer than 63 days) then the Part D program user is subject to a Part D late enrollment fee.
Online CMS Reporting
Although most employers distribute the Part D notice to participants in the fall, the Medicare rules also impose a second reporting requirement - direct government notification about the creditable status of the employer's prescription drug plan. The disclosure requirement to the Centers for Medicare & Medicaid Services (CMS) can be easy to overlook because the deadline falls within the first 60 days after the end of the plan year. (By March 1, 2012 for calendar year plans.) For calendar year plans, the CMS reporting date is quickly approaching.
For CMS reporting compliance, the group health plan must register with the government and electronically communicate whether its prescription drug coverage qualifies as creditable or non-creditable. The government needs this information to effectively coordinate Medicare Part D enrollment. All plan sponsors providing prescription drug coverage are required to make this disclosure - even if they do not make coverage available to retirees.
The online submission and additional explanatory information is available at the following link: https://www.cms.gov/CreditableCoverage/45_CCDisclosureForm.asp