IMPORTANT INFORMATION REGARDING EMPLOYER DISCLOSURE NOTICE REQUIREMENTS
- CMS Disclosure Form
As many of you know, the Medicare Modernization Act provides for a number of new Medicare benefits, including coverage for prescription drugs effective January 1, 2006. This is the first time in the history of Medicare that coverage for outpatient prescription drugs has been covered by the Medicare program.
Everyone on Medicare will be eligible for the new prescription drug program. This includes those who may be covered by other programs, such as those covered as active employees or as retirees of employer-sponsored plans. There will be an initial open enrollment period for the prescription drug program. 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 can continue under that plan if he wishes instead of enrolling in the Medicare drug program during the initial open enrollment period. When that person is no longer covered by an employer plan, he can enroll in the Medicare prescription drug program without paying any penalty for late enrollment.
On the other hand, 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 he decides not to enroll in the Medicare prescription drug program during the initial open enrollment period, he will pay a higher premium for Medicare prescription drug coverage once he does enroll that will increase with every month beyond the initial enrollment period that he did not enroll. This additional premium will be permanent.
For this reason, 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) require that all employers provide a disclosure notice to their employees who are on Medicare to provide them this information.
Although this is a requirement for employers, we are hopeful that it will be viewed as an opportunity to be sure that each and every one of an employer’s employees is notified that there is a new Medicare drug benefit. As we all know, Medicare beneficiaries frequently depend on family and friends to give them advice about their Medicare decisions. It’s important that everyone, regardless of age, be aware of the new program.
The resources that follow will assist employers in meeting the requirements.
Sources: National Association of Health Underwriters; Centers for Medicare and Medicaid Service (CMS)
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