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Do you offer health coverage to your employees? Does your group health plan cover outpatient prescription drugs? If so, federal law requires you to complete an online disclosure form every year with information about your plan’s drug coverage. You have 60 days from the start of your health plan year to complete the form. For instance, for a calendar-year health plan, this year’s deadline is March 1, 2018.

Background

The Centers for Medicare and Medicaid Services (CMS) is a federal agency that collects data and administers various federal programs. The agency utilizes the CMS online tool to collect information from employers about whether their group health plan’s prescription drug coverage is creditable or noncreditable. Creditable coverage means the group health plan’s prescription drug coverage is actuarially equivalent to Medicare’s Part D drug plans. In other words, the group plan is considered creditable if its drug benefits are as good as or better than Medicare’s benefits.

To confirm whether your plan provides creditable or noncreditable coverage, check with the plan’s carrier or HMO (if insured) or the plan’s actuary (if self-funded). CMS provides guidance to help plan sponsors, carriers, and actuaries determine the plan’s status.

Deadline for Disclosure

All group health plans that include any outpatient prescription drug benefits, regardless of whether the plan is insured, self-funded, grandfathered, or nongrandfathered, must complete the CMS disclosure requirement. There is no exception for small employers.

Complete the CMS online disclosure form every year within 60 days of the start of the plan year. For instance, for calendar-year plans, this year’s deadline is March 1, 2018.

Additionally, if your plan terminates or its status changes between creditable and noncreditable coverage, you must disclose the updated information to CMS within 30 days of the change.

Completing the Disclosure Form

The CMS online tool is the only method allowed for completing the required disclosure. From this link, follow the prompts to respond to a series of questions regarding the plan. The link is the same regardless of whether the employer’s plan provides creditable or noncreditable coverage.

The entire process usually takes only 5 or 10 minutes to complete. To save time, have the following information handy before you start filling in the form:

  • Information about the plan sponsor (employer): Name, address, phone number, and federal Employer Identification Number (EIN).
  • Number of prescription drug options offered (e.g., if employer offers two plan options with different benefit levels, the number is “2”).
  • Creditable/Noncreditable Offer: Indicate whether all options are creditable or noncreditable or whether some are creditable and others are noncreditable.
  • Plan year beginning and ending dates.
  • Estimated number of plan participants eligible for Medicare (and how many are participants in the employer’s retiree health plan, if any).
  • Date that the plan’s Notice of Creditable (or Noncreditable) Coverage was provided to participants.
  • Name, title, and email address of the employer’s authorized individual completing the disclosure.

We suggest you print a copy of the completed disclosure to keep for your records.

Note: Employers that receive the Retiree Drug Subsidy (RDS), or sponsor health plans that contract directly with one or more Medicare Part D plans, should seek the advice of legal counsel regarding the applicable disclosure requirements.

Additional Disclosure Requirement

Separate from the CMS online disclosure requirement, employers also must distribute a disclosure notice to Medicare-eligible group health plan participants. The deadline for distributing the participant notice is October 14 of the preceding year. It often is difficult for employers to identify which employees and spouses may be Medicare-eligible, so most employers simply distribute the notice to all participants regardless of age or status. For information about the notice requirement, see our previous post.

 

Originally Published By ThinkHR.com

Two tri-agency (Internal Revenue Service, Employee Benefits Security Administration, and Centers for Medicare and Medicaid Services) Interim Final Rules were released and became effective on October 6, 2017, and were published on October 13, 2017, allowing a greater number of employers to opt out of providing contraception to employees at no cost through their employer-sponsored health plan. The expanded exemption encompasses all non-governmental plan sponsors that object based on sincerely held religious beliefs, and institutions of higher education in their arrangement of student health plans. The exemption also now encompasses employers who object to providing contraception coverage on the basis of sincerely held moral objections and institutions of higher education in their arrangement of student health plans. Furthermore, if an issuer of health coverage (an insurance company) had sincere religious beliefs or moral objections, it would be exempt from having to sell coverage that provides contraception. The exemptions apply to both non-profit and for-profit entities.

The currently-in-place accommodation is also maintained as an optional process for exempt employers, and will provide contraceptive availability for persons covered by the plans of entities that use it (a legitimate program purpose). These rules leave in place the government’s discretion to continue to require contraceptive and sterilization coverage where no such objection exists. These interim final rules also maintain the existence of an accommodation process, but consistent with expansion of the exemption, the process is optional for eligible organizations. Effectively this removes a prior requirement that an employer be a “closely held for-profit” employer to utilize the exemption.

On November 30, 2017, the Centers for Medicare and Medicaid Services (CMS) released guidance on accommodation revocation notices. Plan participants and beneficiaries must receive written notice if an objecting employer had previously used the accommodation and, under the new exemptions, no longer wishes to use the accommodation process. The Interim Final Rules required the issuer to provide written revocation notice to plan participants and beneficiaries. CMS’ recent guidance clarifies that the employer, its group health plan, or its third-party administrator (TPA) may provide written revocation notice instead of the issuer.

CMS’ guidance also clarifies the timing of the revocation notice. Under the Interim Final Rules, revocation is effective on the first day of the first plan year that begins on or after 30 days after the revocation date. Alternatively, if the plan or issuer listed the contraceptive benefit in its Summary of Benefits and Coverage (SBC), then the plan or issuer must give at least 60 days prior notice of the accommodation revocation (SBC notification process). CMS’ guidance indicates that, even if the plan or issuer did not list the contraceptive benefit in its SBC, the employer is permitted to use the 60-day advance notice method to revoke the accommodation as long as the revocation is consistent with any other applicable laws and contract provisions regarding benefits modification.

Further, if the employer chooses not to use the SBC notification process to notify plan participants and beneficiaries of the accommodation revocation and if the employer instructs its issuer or TPA not to use the SBC notification process on the employer’s behalf, then the employer, its plan, issuer, or TPA must send a separate written revocation notice to plan participants and beneficiaries no later than 30 days before the first day of the first plan year in which the revocation will be effective.

Unlike the SBC notification process, which would allow mid-year benefit modification, if an employer uses the 30-day notification process, the modification can only be effective at the beginning of a plan year.

Employers that object to providing contraception on the basis of sincerely held religious beliefs or moral objections, who were previously required to offer contraceptive coverage at no cost, and that wish to remove the benefit from their medical plan are still subject (as applicable) to ERISA, its plan document and SPD requirements, notice requirements, and disclosure requirements relating to a reduction in covered services or benefits. These employers would be obligated to update their plan documents, SBCs, and other reference materials accordingly, and provide notice as required.

Employers are also now permitted to offer group or individual health coverage, separate from the current group health plans, that omits contraception coverage for employees who object to coverage or payment for contraceptive services, if that employee has sincerely held religious beliefs relating to contraception. All other requirements regarding coverage offered to employees would remain in place. Practically speaking, employers should be cautious in issuing individual policies until further guidance is issued, due to other regulations and prohibitions that exist.

By Danielle Capilla
Originally Published By United Benefit Advisors

Are you an employer that offers or provides group health coverage to your workers? Does your health plan cover outpatient prescription drugs—either as a medical claim or through a card system? If so, be sure to distribute your plan’s Medicare Part D notice before October 15.

Purpose
Medicare began offering “Part D” plans—optional prescription drug benefit plans sold by private insurance companies and HMOs—to Medicare beneficiaries many years ago. Persons may enroll in a Part D plan when they first become eligible for Medicare. If they wait too long, a “late enrollment” penalty amount is permanently added to the Part D plan premium cost when they do enroll. There is an exception, though, for individuals who are covered under an employer’s group health plan that provides “creditable” coverage. (“Creditable” means that group plan’s drug benefits are actuarially equivalent or better than the benefits required in a Part D plan.) In that case, the individual can delay enrolling for a Part D plan while he or she remains covered under the employer’s creditable plan. Medicare will waive the late enrollment premium penalty for individuals who enroll in a Part D plan after their initial eligibility date if they were covered by an employer’s creditable plan. To avoid the late enrollment penalty, there cannot be a gap longer than 62 days between the group plan and the Part D plan.

To help Medicare-eligible persons make informed decisions about whether and when to enroll in a Part D drug plan, they need to know if their employer’s group health plan provides creditable or noncreditable prescription drug coverage. That is the purpose of the federal requirement for employers to provide an annual notice (Employer’s Medicare Part D Notice) to all Medicare-eligible employees and spouses.

Employer Requirements

Federal law requires all employers that offer group health coverage including any outpatient prescription drug benefits to provide an annual notice to plan participants. The notice requirement applies regardless of the employer’s size or whether the group plan is insured or self-funded:

  • Determine whether your group health plan’s prescription drug coverage is “creditable” or “noncreditable” for the upcoming year (2018). If your plan is insured, the carrier/HMO will confirm “creditable” or “noncreditable” status. Keep a copy of the written confirmation for your records. For self-funded plans, the plan actuary will determine the plan’s status using guidance provided by the Centers for Medicare and Medicaid Services (CMS).
  • Distribute a Notice of Creditable Coverage or a Notice of Noncreditable Coverage, as applicable, to all group health plan participants who are or may become eligible for Medicare in the next year. “Participants” include covered employees and retirees (and spouses) and COBRA enrollees. Employers often do not know whether a particular participant may be eligible for Medicare due to age or disability. For convenience, many employers decide to distribute their notice to all participants regardless of Medicare status.
  • Notices must be distributed at least annually before October 15. Medicare holds its Part D enrollment period each year from October 15 to December 7, which is why it is important for group health plan participants to receive their employer’s notice before October 15.
  • Notices also may be required after October 15 for new enrollees and/or if the plan’s creditable versus noncreditable status changes.

Preparing the Notice(s)
Model notices are available on the CMS website. Start with the model notice and then fill in the blanks and variable items as needed for each group health plan. There are two versions: Notice of Creditable Coverage or Notice of Noncreditable Coverage and each is available in English and Spanish:

Employers who offer multiple group health plans options, such as PPOs, HDHPs, and HMOs, may use one notice if all options are creditable (or all are noncreditable). In this case, it is advisable to list the names of the various plan options so it is clear for the reader. Conversely, employers that offer a creditable plan and a noncreditable plan, such as a creditable HMO and a noncreditable HDHP, will need to prepare separate notices for the different plan participants.

Distributing the Notice(s)
You may distribute the notice by first-class mail to the employee’s home or work address. A separate notice for the employee’s spouse or family members is not required unless the employer has information that they live at different addresses.

The notice is intended to be a stand-alone document. It may be distributed at the same time as other plan materials, but it should be a separate document. If the notice is incorporated with other material (such as stapled items or in a booklet format), the notice must appear in 14-point font, be bolded, offset, or boxed, and placed on the first page. Alternatively, in this case, you can put a reference (in 14-point font, either bolded, offset, or boxed) on the first page telling the reader where to find the notice within the material. Here is suggested text from the CMS for the first page:

“If you (and/or your dependents) have Medicare or will become eligible for Medicare in the next 12 months, a federal law gives you more choices about your prescription drug coverage. Please see page XX for more details.”

Email distribution is allowed but only for employees who have regular access to email as an integral part of their job duties. Employees also must have access to a printer, be notified that a hard copy of the notice is available at no cost upon request, and be informed that they are responsible for sharing the notice with any Medicare-eligible family members who are enrolled in the employer’s group plan.

CMS Disclosure Requirement
Separate from the participant notice requirement, employers also must disclose to the CMS whether their group health plan provides creditable or noncreditable coverage. The plan sponsor (employer) must submit its annual disclosure to CMS within 60 days of the start of the plan year. For instance, for calendar-year group health plans, the employer must comply with this disclosure requirement by March 1.

Disclosure to CMS also is required within 30 days of termination of the prescription drug coverage or within 30 days of a change in the plan’s status as creditable coverage or noncreditable coverage.

The CMS online tool is the only method allowed for completing the required disclosure. From this link, follow the prompts to respond to a series of questions regarding the plan. The link is the same regardless of whether the employer’s plan provides creditable or noncreditable coverage. The entire process usually takes only 5 or 10 minutes to complete.

Originally Published By ThinkHR.com

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