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Notice Requirements for Employers and Union Plan Sponsors under the Medicare Modernization Act of 2003. |
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The information reported here is derived from U.S. government sources and from material published in health insurance industry trade journals. One excellent source was an article entitled: "Important Information Regarding Employer Disclosure Notice Requirements" published in the September 2005 issue of the Health Insurance Underwriter. The article was prepared by the National Association of Health Underwriter's Government Affairs Department. |
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Under the provisions of the Medicare Modernization Act of 2003, coverage for outpatient prescription drugs will be provided by the Medicare program for the first time in history. This Medicare coverage is effective beginning January 1, 2006 and will be available to everyone who is eligible for Medicare - including those who are also covered under plans sponsored by their employer or union. |
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Medicare-eligible persons can choose whether: (a) to retain the prescription drug coverage they have with the plan sponsored by their employer or union or (b) to purchase the Medicare prescription drug coverage. The initial open enrollment period for persons interested in purchasing the Medicare prescription drug plan is November 15, 2005 through May 15, 2006 |
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If I'm an employer or a union and sponsor a health plan, what do
I have to do? |
| Why is the Disclosure Notice important? Your notice tells people whether your plan's coverage is at least as good as the Medicare prescription drug coverage. Coverage that is at least as good as the Medicare coverage is called "creditable" coverage. Coverage that is not as good is called "non-creditable" coverage. |
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Why does that make a difference? |
| What's the advantage? There will be an initial open enrollment period for the Medicare prescription drug program. That period is from November 15, 2005 through May 15, 2006. If a person elects to remain in a plan with creditable coverage, then at some point in the future when that person is no longer covered by the creditable coverage plan, he or she can enroll in the Medicare prescription drug plan without paying any penalty (in the form of higher premiums) for late enrollment. However, if the same person had elected to remain in a plan with non-creditable coverage, then when he or she is no longer covered by that plan and enrolls in the Medicare prescription drug plan, he or she will pay a higher premium for the Medicare coverage. |
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Listed below are some documents which will explain your duties as a Plan Sponsor and give you copies of the material you need to distribute to your employees or union members. All of these documents are downloadable. |
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Documents |
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Also listed are some links to other sites which will give you more information. |
