Medicare Part D
What is MEDICARE PART D?
The Medicare Prescription Drug, Improvement, and Modernization Act of 2003, provides Medicare beneficiaries access to outpatient prescription drug coverage through Medicare Part D. Beneficiaries will have the choice of retaining any current prescription drug benefit they may already have outside of Medicare, or choose to enroll in one of two types of Part D plans. All individuals who are Medicare eligible are eligible for Part D.
What Employer Compliance is Required?
Employers are required to determine whether their prescription drug plan would qualify as creditable coverage and inform the Centers for Medicare & Medicaid Services if their plan qualifies or not. In order to qualify, the plan must pay at least as much as Part D would in total for all Medicare eligible employees. Most prescription drug plans offered by employers will pass as creditable coverage, but employers should work with their Pharmacy Benefit Manager to make the determination about their specific plan design. Employers must also communicate to all Part D eligible individuals enrolled in their plans (both retirees and Medicare eligible active employees) if the coverage they offer qualifies as creditable coverage. If it is creditable coverage, Medicare eligible employees may choose to waive Part D coverage during the time they are covered under the employer plan and will not be charged the premium penalty if they enroll in Part D upon termination of the employer-sponsored plan.
