Employers or group health plans that offer prescription drug coverage to active employees and retirees who are eligible for Medicare must disclose to the Centers for Medicare & Medicaid Services (CMS) whether the coverage is “creditable prescription drug coverage.” Generally, prescription drug coverage is considered creditable only if its value meets or exceeds the value of the Medicare prescription drug benefit. (Note that this disclosure is separate from, and in addition to, the creditable coverage disclosures that must be provided to Medicare-eligible individuals and their dependents.)
The Disclosure Notice to CMS must be made annually, and upon any change that affects whether the drug coverage is creditable. The initial Disclosure Notice must be filed with CMS by March 31, 2006, for plan years that end in 2006. Employers must use the electronic Disclosure Notice form on the CMS website.
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