The initial notice to Part D eligible participants was required to be provided prior to November 15, 2005. (For additional information regarding this notice, see our Legal Alert dated August 31, 2005, which may be found on our website at http://www.kilpatrickstockton.com/ .)

As directed by the final regulations, CMS recently issued guidance regarding the form and content of the required notice to CMS. The highlights of this guidance are discussed below:

·         The notice must be provided by most group health plans providing prescription drug coverage, including plans sponsored by private employers, churches, and Federal, State and local governments.  There is a limited exemption for plan sponsors who have been approved for the retiree drug subsidy with respect to those qualified covered retirees for whom the plan sponsor is claiming the subsidy.    

·         The notice must be provided to CMS electronically, using the form provided by CMS which may be obtained from the CMS Creditable Coverage Disclosure Web Page at http://www.cms.hhs.gov/creditablecoverage .  

·         The notice must be provided annually at the following times:

    >   For plan years that end in 2006, the notice must be provided no later than March 31, 2006.        

    > For plan years that end in 2007 and beyond, the notice must be provided within 60 days of the first day of the plan year.

The notice must also be provided within 30 days of termination of the prescription drug coverage or a change in the creditable coverage status of the prescription drug coverage.

·         When completing the notice, plan sponsors may aggregate the data for all benefit options (e.g., PPO, HMO, indemnity) which are creditable and report this information on a single form.  Similarly, plan sponsors may also aggregate the data for all benefit options which are not creditable and report the information on a separate form.  It also appears that the information must be provided on a plan-by-plan basis – meaning that a separate form must be used for those employers who have more than one ERISA group health plan that provides prescription drug benefits.  

·         Employers are reminded that in response to the question that asks for the name of the entity offering the prescription drug coverage, employers should list the name of the plan sponsor, not the name of any carrier that the employer may have contracted with for insurance coverage or for administration of the health plan.  

·         Plan sponsors must estimate the number of individuals covered under the plan who are eligible for Medicare Part D as of the first day of the plan year.  

·         Plan sponsors must report the date on which the notice of creditable coverage was provided to Part D eligible participants. 

Overall, the notice is relatively straightforward, particularly as plan sponsors were already required to determine whether their prescription drug coverage was “creditable” in order to issue the required notice to Part D eligible participants. However, plan sponsors will need to collect some data in order to file by the March 31, 2006 deadline, including an estimate of the number of Medicare Part D eligible individuals participating in the plan. In addition, plan sponsors should put in place appropriate procedures to ensure that the required notice is provided to CMS on an annual basis or in the event the creditable coverage status of the prescription drug coverage changes during the year.

If you would like additional information about Medicare Part D, please contact:

Office Name Phone Email

Atlanta Jennifer Schumacher 404-815-6298
JSchumacher@KilpatrickStockton.com

Raleigh Martha Sewell 919-420-1781
MSewell@KilpatrickStockton.com

Washington, DC Mark L. Stember 202-508-5802
MStember@KilpatrickStockton.com

Winston-Salem Bill E. Wright 336-607-7424
BWright@KilpatrickStockton.com