What is creditable coverage and how does it affect Medicare?
· If you delay Medicare enrollment without credible coverage, you must pay a late enrollment penalty in addition to your premium. Therefore, delaying beyond 63 days without creditable coverage may result in higher monthly costs.
How do I know if my Medicare Part D coverage is creditable?
Beneficiaries who have other sources of drug coverage - through a current or former employer or union, for example - may stay in that plan and choose not to enroll in the Medicare drug plan. If their other coverage is at least as good as the new Medicare drug benefit (and therefore considered "creditable coverage" ), then the beneficiary can continue to get the high quality …
Why should I hold on to my creditable coverage notice?
You'll get this notice each year if you have drug coverage from an employer/union or other group health plan. This notice will let you know whether or not your drug coverage is “creditable.”.
How do I know if my drug coverage is creditable?
· People on the plan who are Medicare-eligible need to know this information because the MMA also created a late enrollment penalty for people who did not have “creditable coverage” for 63 days or longer before their initial enrollment period for the Medicare prescription drug benefit.
What is it?
You'll get this notice each year if you have drug coverage from an employer/union or other group health plan. This notice will let you know whether or not your drug coverage is “creditable.”
What should I do if I get this notice?
Keep the notice. You may need it if you decide to join a Medicare drug plan later. (Don't send creditable coverage letters/certificates to Medicare.)
What happens if a group plan isn't creditable?
If the employer plan’s prescription drug coverage isn’t creditable, the business only needs to be honest both in their CMS disclosure and their participant notice. For Medicare-eligible beneficiaries, if they learn their group plan isn’t creditable, then they can decide if they want to enroll in a higher-value Medicare Part D plan instead.
When do you send a notice to Medicare?
That notice needs to be delivered before October 15thof each year. The goal is for affected people to have the right information in hand during Medicare’s annual election period. There is no specific day a plan participant needs to get the notice, though. So, employers who wish to include it in a package of other annual notices given at open enrollment are free to choose that option. The disclosure just needs to be reflective of current prescription drug benefits.
How long after a health insurance renewal do you have to certify?
It is tempting for health insurance brokers to offer to do the certification for employer clients. However, our friendly advice is to avoid making that offer. Each plan sponsor should certify their coverage themselves. The disclosure is due within 60 days after the start of each plan year. So, our tip for brokers is to set a calendar reminder to contact each group client approximately 30 days after their renewal instead. Then, use that time to walk each client through the certification process and the CMS disclosure deadline. This is also a good time to follow up on any other post-renewal matters.
When do you report a prescription drug plan to CMS?
The deadline to do so is no later than 60 days after the start of each plan year. That means calendar-year plans need to report to CMS soon – by March 1st. The procedure for notifying CMS about a plan’s creditable coverage status is pretty straightforward. The plan sponsor needs to access this simple online form. Then they enter contact information and the business’s federal tax identification number and complete the certification. The process only takes a few minutes.
Do employers have to notify employees of Medicare?
It is hard for employers to determine Medicare eligibility, particularly for covered dependents. So we think it’s a good idea to notify all employees and retirees on the plan. CMS has templates for employers to use, but the model text is a bit confusing. Employers can modify the sample notices to suit their own needs, and a broker can help with this process. Each employer plan needs to have their creditable notice ready year-round. So it makes sense to update it at the beginning of the plan year. Brokers can help their clients update their notice when the employer group completes its annual CMS disclosure.
Does Medicare require employer coverage?
In a word, nothing. There is no requirement that an employer offers Medicare creditable coverage, and there is no penalty to any group that doesn’t. There are only two things employer groups that offer prescription drug benefits to anyone who might be Medicare-eligible must do. (1) Tell the federal government about their plan (s) through the annual disclosure. (2) Send an accurate notice each year to all active employee plan participants and covered retirees that could be Medicare-eligible.
Is Medicare Part D creditable?
If so, then the employer’s prescription drug coverage is considered to be “creditable coverage.”
What is creditable coverage?
What is meant by Creditable Coverage and How do I know if I have Creditable Coverage? Prescription drug plans are considered "creditable" when they meet or exceed the Centers for Medicare and Medicaid Services (CMS) Standard Medicare Part D Prescription Drug plan.
What is the maximum deductible for Medicare 2022?
The maximum deductible can change each year. The 2022 maximum initial deductible is $480. Please see The 2022 Medicare Part D Model Plan Parameters for a comparison of changes each year.
What is a prescription drug plan?
1) Provides coverage for brand and generic prescriptions; 2) Provides reasonable access to retail providers and, optionally, for mail order coverage; 3) The plan is designed to pay on average at least 60% of participants’ prescription drug expenses; and. 4) Satisfies at least one of the following:
How much is a lifetime combined benefit for integrated health?
For entities that have integrated health coverage, the integrated health plan has no more than a $250 deductible per year, has no annual benefit maximum or a maximum annual benefit payable by the plan of at least $25,000 and has no less than a $1,000,000 lifetime combined benefit maximum.
Does Medicare Part D have late enrollment penalties?
People who already have creditable Prescription Drug coverage and continue to use this coverage without purchasing a Medicare Part D plan - will not be subject to the 1% per month premium penalty for late enrollment.
Can you use 4 (a) and 4 (b) in a health insurance plan?
However, the standards listed under 4 (a) and 4 (b) may not be used if the entity’s plan has prescription drug benefits that are integrated with benefits other than prescription drug coverage (i.e. Medical, Dental, etc.). Integrated plans must satisfy the standard in 4 (c).
Is a retiree drug plan creditable?
If an entity is not an employer or union that is applying for the retiree drug subsidy, it can determine that its prescription drug plan’s coverage is creditable if the plan design meets all four of the following standards. However, the standards listed under 4 (a) and 4 (b) may not be used if the entity’s plan has prescription drug benefits that are integrated with benefits other than prescription drug coverage (i.e. Medical, Dental, etc.). Integrated plans must satisfy the standard in 4 (c).
What happens if you don't have a certified statement for Medicare?
If you don't have that certified statement, you might end up paying a penalty and you want to avoid that.
Why does creditable drug coverage matter?
Creditable drug coverage matters because it may allow you to delay enrolling in Medicare and avoid the Part D late enrollment penalty. The penalty is charged if you enroll in a Medicare Part D plan after your Initial Enrollment Period (IEP) ends and don’t qualify for an exception.
What is a statement of drug coverage?
Your employer is supposed to provide you a statement certifying whether or not the drug coverage in your plan is creditable compared with a Part D plan. Make sure you get that statement because it's going to protect you down the road if you have any differences of opinion.
What is Medicare Made Clear?
Medicare Made Clear is brought to you by UnitedHealthcare to help make understanding Medicare easier. Click here to take advantage of more helpful tools and resources from Medicare Made Clear including downloadable worksheets and guides.
How much is the late penalty for Medicare?
The late penalty for Medicare Part D is an additional 1 percent of the premium amount for each month you’re late. You pay the penalty for as long as you have Part D. For example, you enroll in a Part D plan that starts on November 1 but your IEP ended on June 30. As a result, you are four months late signing up for Part D.
What happens if you don't sign up for Part D?
If you don't sign up for Part D when you need to, you could get hit with substantial late enrollment penalties which you'd like to avoid.
Do you need Part A and Part B for Medicare?
You will need to have Part A and/or Part B to get a stand-alone Part D plan, and you will need both Parts A & B to get a Medicare Advantage plan.
What is creditable coverage?
Creditable coverage is a health benefit, prescription drug, or health insurance plan—including individual and group health plans—that meet a minimum set of qualifications . Creditable coverage is a measure used to figure out if policyholders must pay late enrollment penalties or, in some cases, coverage and costs associated ...
What are the requirements for a creditable drug plan?
In order to be considered creditable, a prescription drug plan must meet these four requirements: 4 . Provide coverage for both brand and generic prescription medication. Provide the policyholder with a reasonably broad option of medication providers, or a mail-order option.
What is grandfathered health insurance?
A grandfathered individual health insurance policy is one that you bought for yourself or your family on or before March 23, 2010, that has not been changed in certain ways that reduce benefits or increase costs to consumers. 8 .
Does prior creditable coverage reduce exclusion period?
If you have prior creditable coverage, it can reduce the exclusion period since creditable coverage means that you had insurance over a period of time. But there is a limited window in which creditable coverage applies.
Is Medicare Part D coverage creditable?
This disclosure provides Medicare-eligible beneficiaries with important information relating to their Medicare Part D enrollment and is mandatory whether the insurer is primary or secondary to Medicare. If the policyholder’s coverage is considered creditable, they may be eligible for subsidies.
Does Medicare cover pre-existing conditions?
The passage of the ACA blocked many insurers from being able to use this exclusion period but it can still happen because they have been covered by previous policies. Medicare typically covers pre-existing conditions without lengthy waits. 7
Is pre-existing condition creditable?
Creditable Coverage and Pre-Existing Conditions. Some people with pre-existing conditions may find that their conditions are excluded from their health insurance plan coverage, although this is no longer the norm thanks to the Affordable Care Act (ACA).
How long does it take to get medicare after you lose coverage?
After two months, in most cases, your Special Enrollment Period for special circumstances ends. If you lose your creditable drug coverage through no fault of your own, you have two months after your current coverage ends (or after the plan tells you the coverage is no longer creditable) to get Medicare prescription drug coverage.
What is Medicare Advantage?
Medicare Advantage is another way to get your Part A and Part B benefits and requires that you’re first enrolled in Medicare Part A and Part B. Medicare Advantage must cover everything that Original Medicare (Part A and Part B) covers except hospice care, which Part A still covers. Medicare Advantage plans often offer extra benefits, ...
How long can you keep a prescription drug plan?
If you’re covered by creditable prescription drug coverage as described above, you can keep the plan as long as you’re still eligible for it. If you decide to drop the policy, you can sign up for a Medicare Prescription Drug Plan, or a Medicare Advantage Prescription Drug plan. You usually have two months after your current coverage ends ...
How long does it take for Medicare to charge a penalty?
The penalty begins after any continuous period of 63 days or more after your Medicare Initial Enrollment Period that you go without credible prescription drug coverage.
How many days can you go without prescription drug coverage?
Make sure you don’t go 63 or more days in a row without creditable prescription drug coverage, or the late-enrollment penalty may apply if you sign up for this benefit later.
Does Medicare Advantage pay Part B?
Medicare Advantage plans often offer extra benefits, such as prescription drug coverage, routine vision, and dental. With a Medicare Advantage plan you must still pay your Part B premium as well as any premium the plan requires.
Is Medicare Part D a stand alone plan?
Medicare prescription drug coverage is available as a stand-alone Medicare Part D Prescription Drug Plan to go alongside your Original Medicare benefits. To enroll in a stand-alone prescription drug plan you only need to be enrolled in Part A or Part B.
