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 your clients 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.
Your clients must communicate their creditable or non-creditable status to their members.
This determination is mandatory at least once a year and the deadline for completion is prior to Oct. 15.
Your clients, not UnitedHealthcare, send creditable coverage notices to members.
Your clients can pay UnitedHealthcare to send creditable coverage notices to members on their behalf.
If your customer’s coverage is creditable, they can elect to pursue a subsidy called the Retiree Drug Subsidy (RDS) program. Under the Patient Protection and Affordable Care Act (PPACA), subsidy payments to plan sponsors became subject to standard tax deduction rules starting in 2013. This optional step requires additional testing and an application process. They can apply for the subsidy by going to the Centers for Medicare & Medicaid Services (CMS) RDS Website. Your clients can apply for the subsidy by visiting www.rds.cms.hhs.gov.
Applications for the subsidy must be submitted 90 days prior to the beginning of an RDS plan year, which can mirror a benefit plan year. For example, if a benefit plan year begins Jan. 1, 2018, and the customer wants their RDS plan year to be the same, they would apply for the subsidy by Oct. 2. If they request an extension, 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. Your clients 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.