Reminder About Medicare Prescription Drug Coverage Employer Disclosure Notice Requirements

The Medicare Modernization Act of 2003 provides for coverage for prescription drugs, and everyone who is covered by Medicare is eligible for this prescription drug program component.  This includes those who may be covered by other programs, such as those covered as active employees or as retirees of employer-sponsored plans.

If a person is currently covered by a prescription drug plan that provides benefits that are at least as good as the Medicare plan, he may continue under that plan if he wishes instead of enrolling in the Medicare drug program during the open enrollment period which runs each year from November 15th through December 31st.  When that person is no longer covered by his employer’s plan, he may enroll in the Medicare prescription drug program without paying a penalty for late enrollment.  Conversely, if the health plan a person is enrolled in does not provide benefits for prescription drugs that are at least as good as Medicare, and the Medicare prescription drug coverage is not enrolled during one’s initial open enrollment period, a premium surcharge, which is permanent, is applied and increases with every month beyond one’s initial enrollment period that they did not enroll.

Because of the aforementioned premium surcharge it is very important that people who are covered by employer-sponsored plans be notified whether or not the coverage they have through their employer plan is at least as good as the Medicare program coverage.  The Centers for Medicare and Medicaid Services (CMS) requires that all employers provide a disclosure notice to their employees who are on Medicare to provide them this information.

Click here to view resources that will assist employers in meeting this requirement.