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CMS Releases New Model Notices for Medicare Part D
On April 26, 2006, the Centers for Medicare & Medicaid (CMS) has released updated guidance regarding disclosure notices to Part D eligible individuals and model disclosure notices that were released in draft form in March 2006. There are only a few differences (all nonsubstantive) between the final versions of these items and the March 2006 drafts. The updated guidance is effective May 15, 2006, and the model notices are intended for use on or after that date. (The guidance and model notices that were issued in 2005 will apply through May 14, 2006.)
Please find below highlights of the differences between the updated items and the 2005 versions:
Model Notices: The creditable and non-creditable coverage disclosure notices (generic notices) include reorganization of information, several clarifications and some new provisions. A new personalized disclosure notice has been provided and includes sample language that plan sponsors may tailor according to whether their plan provides creditable or noncreditable coverage. It may be used when Medicare beneficiaries request a copy of their creditable coverage notice. In addition, it allows sponsors offering creditable coverage to provide specific dates of coverage for an individual. This notice and can also be provided in lieu of the generic notices. In order to determine whether a Part D eligible individual must pay a late enrollment penalty, Part D plans are required to review either a personalized disclosure notice or a generic notice (the latter must include proof that the individual was enrolled during the applicable time period and elected coverage).
Late Enrollment Penalty: CMS has clarified that the late enrollment penalty for Part D eligible individuals who go without creditable coverage for 63 days or longer increases by at least 1% "of the national benchmark premium (which is set by CMS and published each year)" for each month without creditable coverage.
Integrated Plan: For purposes of qualifying for simplified method of determining whether a plan provided creditable coverage, an integrated plan is any plan of benefits offered to Medicare eligible individuals where the prescription drug benefit is combined with other coverage offered by the entity (medical, dental, etc.) and the plan has certain plan provisions evidencing combined plan year deductibles, annual benefit maximums, and lifetime benefit maximums.
COBRA - Covered Medicare Beneficiaries: The notice requirement applies to all Medicare beneficiaries who are "active employees, disabled, on COBRA and those individuals who are retired," as well as Medicare beneficiaries who are covered as spouses or dependents (including spouses or dependents who are disabled or on COBRA) under active employee coverage and retiree coverage.
