Medicare Part D Disclosure Model Notices & CMS Disclosure Instructions

Notice deadline 10/15/16

There are two steps to be compliant:

  1. Medicare eligible employees/dependents age 65 or greater must be notified by October 15th if the employer sponsored prescription drug plan meets or exceeds Medicare Part D’s prescription drug benefits (called “creditable coverage”).  The employee/dependent notices are attached along with instruction.
  • Note: Virtually all health plans pass the credibility testing. Some prescription drug plans are NOT considered creditable coverage under an H S A plan (High deductible health plan).  If you need verification of your plan passing this test so you can send the proper notices to your employees, please reach out to us and we can help.  Attached are the sample model notices that you would edit with your company info in it.
  1. Employers must go to the CMS website (see link below) to complete their responsibilities.

Here is more information on WHY you have to do this and directions as well:

The Medicare Modernization Act (MMA) requires employers whose policies include prescription drug coverage to provide a written disclosure notice to all Medicare eligible policyholders of whether such coverage is creditable. Creditable coverage means that the coverage is expected to pay, on average, as much as the standard Medicare prescription drug coverage.

This disclosure must be provided prior to October 15th, 2016 (and at various times as stated in the regulations) to:

  • Medicare eligible active working individuals and their dependents (including a Medicare eligible individual when he or she joins the plan);
  • Medicare eligible COBRA individuals and their dependents;
  • Medicare eligible disabled individuals covered under an employer’s prescription drug plan; and
  • Any retirees and their dependents.

Please see the attached Model notices available for distribution. 

Additional Disclosure Requirements
Under the law, employers must also complete an online disclosure to CMS to report the creditable coverage status of their prescription drug plan at certain intervals.

The disclosure submission process is composed of the following steps to complete the online Creditable Coverage Disclosure Form available via the following link:

Disclosure to CMS Instructions:

Step 1 -Enter the Disclosure Information

Step 2 -Verify and Submit Disclosure Information, and

Step 3 -Receive Submission Confirmation

Please see the attached ‘Disclosure to CMS Instructions’ for further information on completing the online Creditable Coverage Disclosure form.

Disclosure to CMS Instructions
Creditable Coverage Disclosure Guidance
Model Non-Creditable Coverage Disclosure Notice
Model Creditable Coverage Disclosure Notice

This is a reminder to prepare for the 2016 Reporting Requirements, if you have not already done so.

Those affected are Applicable Large Employers (ALE’s).  ALE’s include those that are self-insured or have over 50 full time employees (including full time equivalent employees).  Commonly owned company’s count toward the ALE calculation.

Prepare for Compliance With Information Reporting Requirements

Information reporting is used to determine compliance with the ACA individual responsibility and “pay or play” provisions. While the information reporting requirements are first effective for coverage offered (or not offered) in 2015, the initial deadlines for reporting entities are in 2016.

  • Determine if you are a reporting entity (and what type) to understand applicable reporting requirements:
    • “Section 6055” Reporting Entities. Self-insuring employers that provide minimum essential health coverage are required to report information on this coverage to the IRS and to covered individuals under section 6055 of the Internal Revenue Code.
    • “Section 6056” Reporting Entities. Employers with 50 or more full-time employees (including FTEs) are required to report information to the IRS and to their employees about their compliance with “pay or play” under Internal Revenue Code section 6056-even those that qualified for 2015 transition relief from the “pay or play” provisions.
  • Begin compiling the required information for section 6055 reporting and/or the required information for section 6056 reporting.
  • Review the IRS Forms and Instructions to prepare for compliance:
  • Determine whether to hire a third party to fulfill reporting responsibilities (reporting entities will still be liable for the failure to report information and furnish employee statements).
  • For section 6056 reporting entities, determine whether you will use the general method of reporting or the simplified alternative method to satisfy the reporting requirements.
  • If the reporting entity plans to furnish employee statements electronically in 2016, ensure that affirmative consent is obtained from employees prior to furnishing (section 6056 reporting entities must also ensure that certain notice, hardware, and software requirements are met).
  • Remember to comply with the information reporting deadlines for calendar year 2015.

Section 6055 Deadlines:

  • First information returns must be filed no later than February 29, 2016 (or March 31, 2016, if filed electronically).
  • First employee statements must be furnished on or before January 31, 2016.

Section 6056 Deadlines:

  • First information returns must be filed no later than February 29, 2016 (or March 31, 2016, if filed electronically).
  • First employee statements must be furnished on or before January 31, 2016.

The Different Parts of Medicare

If you have reached the age of 65 (or are under the age 65 but qualify for Social Security disability benefits), you probably have questions about Medicare.  The following is a simple explanation to help unravel some of the confusion regarding the different parts of Medicare:

  • Part A of Medicare covers you for your Inpatient Hospital expenses. A qualified recipient receives Part A at no cost.
  • Part B covers your Medical Expenses (i.e. doctors’ visits and diagnostic testing).  The premium for Part B coverage ranges from $105 to $336 depending on your income.
  • Part C (also called Medicare Advantage Plans) offers medical and hospital coverage through a private insurance carrier. There may be a premium depending on the county you live in.  Most Medicare Advantage plans are HMO’s or PPOs.  You must be enrolled into Medicare parts A and B to enroll in a part C plan.
  • Part D is your prescription drug coverage. There is also a premium for this depending on the plan you choose.  Part D plans have what is called a “Donut Hole”.  Once the total cost of your retail medication(s) reaches $2,970 for the year, then you will pay the full amount of your medications until you have paid a grand total of $4,750 out of pocket (and then catastrophic coverage picks up most of the cost thereafter).  There is assistance available to you while you are in the “donut hole” that will provide you with discounts (approximately 50% savings off of brand name drugs and approximately 20% savings off the lower cost generic medications.
  • Medigap Insurance is a supplement to Medicare Parts A and B that can cover all of the gaps in Medicare Parts A and B or offer you a plan where you will only pay copayments for services.

Where do you find details about Medicare?  You may contact the Social Security Administration at 800-772-1213 to enroll or ask questions about whether or not you are eligible.   You may also visit


Carol Winwood RHU, REBC


Seasonal and Temporary Workers (Variable hour employees) 

Since I love to keep things simple, the following is the short version of a complex answer.

How does an Employer determine which variable hour employees are considered full time working an average of 30 hours per week and therefore eligible for medical insurance?

  • Employees are considered “variable” employee’s if it is unclear whether the employee is expected to work an average of 30 hours per week for the measurement period (as discussed below).


  • In 2015: Employers with 100+ FTE (full time equivalent) employees will be required to provide up to 70% of their full time employees with affordable health care coverage that meets minimum requirements, or pay a penalty.

How do you know who qualifies?  I’m glad you asked.  This is the fun part:

You may use the “Safe Harbor” method:  This is guidance that discusses a voluntary “safe harbor” method for determining whether these employees should be classified as full or part time and when health insurance coverage for those deemed full time must begin to avoid the penalty.

  • Variable and seasonal workers start out in an initial “measurement period” during which the hours they actually work are recorded (Standard measurement periods range from 3-12 months; employer’s choice).


  • Then there is an “administrative period” where the employer determines if the employee worked full or part time during the “measurement period” and enrolls the employee into the health plan if he or she is deemed eligible.


  • Finally, there is the “stability period” during which the employee is considered and treated as full time or part time, as determined during the “measurement period”, even if their hours worked during the “stability period” change. The stability period is at least 6 months long however, no shorter than the measurement period which can be up to 12 months.


Hours during the “stability period” are averaged into the next measurement period which means the variable employee must re-qualify as full time based on the prior year’s hours worked.

We too hope for simpler regulations but for now, this is ours to keep.


Workplace Wellness: Lower healthcare costs by becoming healthy?

We all know healthcare costs are at an all-time high with no great solutions in sight (sorry Obamacare).   At what point do we begin using other methods that are within our own reach to reduce our out of pocket medical costs?  It is my belief that we can reduce our individual costs as well as Employer costs by maintaining a healthier lifestyle.

Can getting healthier cut our healthcare costs for Employers and Individuals? 

Sure!  If an individual is not using their policy as often because they are no longer dependent on medications (or using fewer medications).  If you are not going to the doctor as often for maintenance of health conditions or diseases then yes, you are reducing your own costs.

Depending on the size of the Employer group, the rates are affected when the employees are healthier because claims are reduced. However, regardless of the size of the group, wellness creates a better work environment.  For instance- Employees may become more alert, experience less headaches, less fatigue, and get relief from allergies which results in less absenteeism and creates a more efficient workplace and therefore affects the Employer’s bottom line. Lower insurance costs and higher profit translate into higher pay!

We believe in this approach which is why we have created our own wellness resource for our clients and their employees that is tailored to each Employer group’s needs.

What is the government doing to generate wellness?

The Department of Labor (DOL) states that in 2014, the Affordable Care Act (Obamacare) is building on existing wellness program policies to promote employer wellness programs and encourage opportunities to support healthier workplaces. The Departments of Health and Human Services (HHS), DOL, and the Treasury are jointly releasing proposed rules on wellness programs to reflect the changes to existing wellness provisions made by the Affordable Care Act and to encourage appropriately designed, consumer-protective wellness programs in group health coverage.

The following are examples of wellness programs:  

  • Fitness center reimbursement- More insurance carriers offer reimbursement for visiting a fitness center. Currently in NY, Oxford/United will pay you and your spouse up to $600 per year for visiting a fitness center.
  • Employees can be awarded for attending a monthly, no cost health education seminar, completing a health risk assessment, a smoking cessation program, and/or lowering cholesterol, blood pressure, weight, etc.

An example of an award (as allowable by law) could be that the Employer charges you lower medical insurance premiums for your participation or completion in a wellness program.

In short, if Employers offer healthy incentives and we take control of our own health; we can reduce our out of pocket healthcare costs all around.  You may benefit from an increased life expectancy, generate a more healthy outlook and attitude, and live a more energetic and productive life.  If that’s ok with you, let’s start taking advantage of this today.

Healthcare Reform Basics in a Nutshell

The Affordable Care Act (ACA) commonly known as “Health Reform” or “Obamacare” was passed in 2010.  This law was aimed at making health care available to all Americans and its implementation continues today and will so for years going forward.

Everyone, with few exceptions, is required to have insurance or otherwise pay a penalty.  The coverage has been expanded to include benefits like preventive care at a $0 copay and coverage for pre-existing conditions, even if you did not have a major medical policy in place previously.

  • Larger companies (50+ employees) usually offer health insurance to their employees. Historically, an Employer contributes a portion of the premium.  This is currently the easiest way for an Employee to enroll into a medical insurance plan and often times their best option.  Now under ACA’s rules, if the Employer does not offer insurance OR does not offer a plan meeting minimum essential benefits and actuarial values and/or does not make the plan affordable, there are penalties that apply.  Employers with 50 or more eligible employees (a portion of the part time employees count toward this number), are subject to the ACA penalty’s however, to help the smaller Employer prepare for the new laws, the penalty is delayed until 2016 therefore, in 2015, the penalty is waived for those Employers who have 50-99 employees.
  • Smaller companies (fewer than 50 employees) usually elect to provide health insurance to their employees as well and may sometimes contribute toward the employee’s premium. Under ACA, the small group employer is now eligible to offer group insurance through the SHOP (Marketplace/Exchange).  Since these groups have less than 50 FT and FTE employees, they are not charged a penalty for not offering medical insurance to their employees.
  • Individual Mandate – Penalties apply to any individual person who does not enroll into a major medical plan. They may enroll through an Employer, with the insurance carrier direct, or in the Marketplace where they may qualify for a subsidy if they meet the income guidelines.

The Health Insurance Marketplace is a new way for people to shop for medical insurance.  All plans have standards that are set and approved by the government.  The marketplaces are set up and run either by the federal government, the state, or by both.  “SHOP” is set up for groups and the “Individual Marketplace” is set up for individuals who are not insured through an Employer.

Taxes and Penalties paid by larger companies help offset the costs of the ACA.  Companies like drug manufacturers also pay fees and taxes to help offset new ACA costs.

There are a few new expanded benefits that most plans are required to have like: 1) the new hire waiting period cannot exceed 90 days, 2) dependent children may remain on their parent’s plan until the age of 26, 3) you cannot be denied coverage due to a pre-existing condition, 4) there are no annual or lifetime limits on essential health benefits, and 5) most plans now have an annual out of pocket limit.  Therefore, once you meet this limit, ALL remaining benefit expenses are paid in full for the remainder of the year.

These are just the very basics.  There are countless additional details that vary depending on each individual situation and therefore you should seek advice from your benefits advisor.  Maybe we can help!