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MIIA Health Benefits Trust

Medicare Part D Materials

Creditable Coverage Notice Requirement

Under the Medicare Modernization Act of 2003, you are required by the Centers for Medicare and Medicaid Services (CMS) to notify your Medicare eligible employees and retirees , their spouses and dependents annually of the creditable coverage status of your prescription drug plan ( s ) . To assist you, MIIA has included two versions of the Notices of Creditable Coverage below.

The first disclosure notice, Notice of Creditable Coverage, is the most general and is what you should be sending out as part of your mailing during open enrollment season. For most MIIA members open enrollment season is close to July 1st. To be certain that the notice reaches spouses and dependents who may be Medicare eligible, this notice should be sent to all employees and retirees.

The second disclosure notice, Notice of Creditable Coverage, is much more detailed and should be provided by you to any Medicare eligible employee and/or retiree , spouse or dependent who is new to a plan or changes plans. It is essential that you provide this notice to your plan participant’s at these times and also upon request. If a plan participant does not have a disclosure notice and then attempts to elect a Part D plan at another time, they may be subject to a late enrollment premium penalty.

As you may know, the MIIA Health Benefits Trust provides detailed Notices of Creditable Coverage to those plan participant’s approaching the age of 65 to advise them that their coverage options are creditable, but the two disclosure notices described above need to come directly from you.

Please keep copies of all Creditable Coverage Disclosure Notices provided on file as a plan participant could request them from the employer at any time. If you have any questions, please contact Chris Bailey at 1-800-374-4405, x268 or Monica Desjardins at x264.

The Medicare Modernization Act and Creditable Coverage Background

What is the Medicare Modernization Act (MMA)?

  • The MMA is a federal law enacted in 2003 that created a new Medicare prescription drug benefit (often referred to as Medicare Part D). Medicare Part D became effective January 1, 2006.
  • Other key provisions of the MMA include:
    • Creating a new type of Medicare insurance plan to provide the new prescription drug benefit. They are called “prescription drug plans” or “PDPs” and “Medicare Advantage Prescription Drug Plans” or “MA-PDs”.
    • Providing a subsidy to employers for maintaining qualified retiree drug programs.
    • Requiring employers who offer prescription drug coverage to notify plan participants ( retirees, COBRA participants, disabled employees and active employees and their dependents) who are Medicare beneficiaries whether their prescription drug plan meets minimum federal benefit standards (whether the coverage is “creditable”) .

What does creditable coverage mean?

  • The test for creditable coverage is whether the employer’s plan is expected to have, on average, a prescription drug claims payout (in aggregate) that is at least equal to the expected claims payout under the standard Part D benefit.

What if I have general Medicare Part D questions?

  • If you have Medicare Part D related questions, please contact Monica Desjardins at ext. 264, Chris Bailey at ext. 268, or your Account Service Representative at 1-800-374-4405.

Page Last updated: Thursday, April 17, 2008

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