Turning 65 With Employer Insurance and the Need to Report Creditable Coverage to CMS

If you’re turning 65 and still intend to have employer coverage, or if maybe you’re delaying your retirement just a few months after your birthday, one thing to keep in mind is making sure you receive an annual written notice of creditable coverage from your employer. As you may or may not know, Medicare will require you to maintain creditable prescription drug coverage or receive a Part D Late Enrollment Penalty. If you’d liked to learn more about the late penalty, check out this article. Otherwise, here’s a little more information to know about your Annual Notice of Creditable Coverage.

The Medicare Modernization Act imposed a new requirement for employers that provide group health plans to notify their Medicare-eligible employees/retirees whether their prescription drug coverage is creditable coverage for Medicare. There are two required disclosures that must be sent out annually.

The first disclosure requirement is an annual written notice to all the Medicare-eligible policyholders and Medicare-eligible individuals planning to join the group health plan. In addition, Medicare-eligible active working individuals and their dependents, Medicare-eligible COBRA individuals and their dependents, & any retirees and their dependents must also receive written notice. This is essential because the Medicare Modernization Act imposes a late enrollment fee on individuals who do not maintain creditable coverage 63 days after their initial enrollment period for a Part D plan.

The second disclosure is specifically for the employers to complete the Online Disclosure to CMS Form. This provides notice of creditable coverage to CMS. The online form must be completed no later than 60 days from the beginning of a plan year, contract year, or renewal year. It is essential for employers to notify CMS so that their employees can avoid Part D late enrollment penalty notices. 

If you have any doubts about your coverage, discuss with your employer and confirm that their creditable coverage is being reported to CMS in order to avoid any hassles later with Late Enrollment Penalties (LEP) related to processing new enrollments for MAPD or PDP Plans.

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