The Medicare Modernization Act mandates that certain entities offering prescription drug coverage, including employer and union group health plan sponsors, disclose to all Medicare-eligible individuals with prescription drug coverage under the plan whether such coverage is "creditable." Determining whether or not certain coverage is creditable is essential to an individual's decision whether to enroll in a Medicare Part D prescription drug plan.
If you offer a prescription drug plan to Medicare-eligible individuals, understand that:
- Annually, UnitedHealthcare engages Optum to perform bulk testing of UnitedHealthcare’s standard benefit designs to satisfy the actuarial value test of the creditable coverage determination.
- Once the plans have been tested, the data becomes available online.
- You must communicate your plan’s creditable or non-creditable status to your members.
- This determination is mandatory at least once a year and the deadline for completion is Oct. 15.
- You, not UnitedHealthcare, sends creditable coverage notices to your members.
- You can pay UnitedHealthcare to send creditable coverage notices to members on your behalf.
If a plan's coverage is creditable, you may elect to pursue a subsidy called the Retiree Drug Subsidy (RDS) program. Under the Patient Protection and Affordable Care Act (PPACA), subsidy payment to plan sponsors became subject to standard tax deduction rules starting in 2013. This optional step requires additional testing and an application process. You can apply for the subsidy by visiting www.rds.cms.hhs.gov.
You must apply for the subsidy 90 days prior to the beginning of an RDS plan year, which can mirror a benefit plan year. For example, if your benefit plan year begins Jan. 1, 2018, and you want the RDS plan year to be the same, you would apply for the subsidy by Oct. 2. If you request an extension, the Centers for Medicare & Medicaid Services (CMS) can grant an additional 30 days to complete the application.
Bulk testing analysis reports and more information about creditable coverage can be found at uhc.com, as well as on the CMS website. You are encouraged to check the websites often for the most up-to-date information. The 2018 tool is available Sept 6. If you have questions about this process, contact your UnitedHealthcare representative.