EMPLOYER ACTION REQUIRED: Distribute Medicare Part D Notices by October 15

Group health plan sponsors must provide Medicare Part D “creditable coverage” notices prior to October 15, 2019, the start date of the Medicare annual enrollment period for Part D, Prescription Drug coverage (open enrollment runs from October 15 to December 7, 2019).

Most plan sponsors use the Model Medicare Part D Notices provided by the Centers for Medicare and Medicaid Services (CMS) to notify affected plan participants. Links to all the model letters (in English and Spanish) are available here in .pdf format. Cornerstone has provided versions of the notice in Word Document format for your convenience.

Creditable Coverage Notice

Non-Creditable Coverage Notice

The carriers plan listings and/or links to their creditable coverage site are available below:

Aetna: Please contact your Broker Advisor for more information.

Anthem: Click here.

Humana: Click here.

UnitedHealthcare: Click here.

Medical Mutual: COSE requested. All other plans, click here.

The October 15 deadline applies for all group health plan sponsors, regardless of plan year, plan size, employer size, grandfather status, or whether the plan is insured or self-funded.

Employers who send out Open Enrollment packets prior to October 15 often include the Medicare Part D notices in the Open Enrollment packets to avoid the extra cost and administrative burden of sending them separately.

Because these notices have not changed since 2018, employers who provided these notices earlier this year are not required to provide them again.

Employers are also required to notify CMS online annually that they have sent out these Part D notices. The notice to CMS is due within 60 days after the start of the plan year. See the last paragraph of this article for details.

When Is the Medicare Part D Notice Required?

Medicare Part D notices must be provided at least once annually, prior to October 15th, which is the beginning of the Part D annual enrollment period. Additional notices must be provided if the employer-provided coverage changes (from creditable to non-creditable, or vice-versa), if the individual requests a copy of the notice, and when an individual first enrolls in the employer plan.

Why is the Part D Notice Required?

The reason plan sponsors are required to provide Part D Notices is because a penalty will be imposed on an individual if he/she, after becoming eligible for Medicare Part D coverage, has a lapse of “creditable” prescription drug coverage for a period of at least 63 days. Additionally, such individuals may have to wait until the following October to join. An individual can elect either Medicare prescription drug coverage or other “creditable coverage” to avoid having a lapse in coverage. Thus, Medicare-eligible participants in employer group health plans must know whether or not the employer group coverage is “creditable” so they do not unwittingly incur a late enrollment penalty.

Additional Details on the Disclosure Requirements

  • Group health plan sponsors to whom this disclosure requirement applies include employers and Unions; multiple employer welfare arrangements (MEWAs); federal, state and local government employers; and churches.
  • The Part D Notice must be provided not only to Medicare-eligible active working employees and their dependents, but also to participants who are retired, on COBRA, or disabled and covered under the employer’s prescription drug plan.
  • Although the requirement is only that “Medicare-eligible” individuals be provided this notice, employers often provide it to all plan participants and dependents, because of the practical difficulty of knowing who is Medicare-eligible.

Annual Notice to CMS Also required, though not by October 15th

Additionally, plan sponsors are required to notify CMS annually, via the CMS website (Online Disclosure to CMS form). This notice must be made within 60 days after the beginning of the plan year (or contract renewal date, for small plans that do not file Form 5500s so do not specify a plan year), and it pertains to the creditable coverage status for the prior plan year. For calendar year plans, this notice must be provided to CMS no later than March 1.  Sponsors of non-calendar year plans should mark their calendars to make sure the disclosure to CMS is made within 60 days after the beginning of the plan year. (E.g., for an April 1 plan year, the CMS online disclosure should be made no later than May 30.)

Additionally, if applicable, plan sponsors must complete the Online Disclosure to CMS Form within 30 days after termination of a prescription drug plan or within 30 days after any change in creditable coverage status.

For additional information, click here for the main CMS webpage that provides guidance on “creditable coverage.” Or you can visit the web page at https://www.cms.gov/Medicare/Prescription-Drug-Coverage/CreditableCoverage/

Ohio Governor Vetoes Health Care Transparency Provisions

Ohio Governor Mike DeWine recently signed the state budget bill (HB 166) into law on July 19, 2019, vetoing some of the health care transparency provisions.

The vetoed provisions established procedures for health care providers to provide cost estimates to consumers and require reimbursement for out-of-network services when performed at an in-network facility.

DeWine said: “I share the legislatures goal of providing consumers the information necessary to make informed decisions about their health care. Additionally,  President Trump has recently signed an executive order requiring implementation of health care transparency  rules, an initiative I also support. As the federal government develops these efforts and others, it is important that the state not place duplicative or burdensome regulations on health care providers, as these compliance costs will inevitability be passed on to the citizens of this State as consumers of healthcare. Over the past few months, the stakeholder community has worked toward this goal and developed common sense solutions, which should continue to be developed. I have requested that relevant state agencies collaborate with stakeholders to continue this important effort. Therefore, this veto is in the public interest.”

House Votes to Repeal ACA Cadillac Tax

On July 17, 2019, the House of Representatives voted 419–6 to pass H.R. 748 legislation to fully repeal the ACA’s Cadillac/excise tax. This the first step to full repeal. Consideration by the Senate is next, along with a companion bill S.684, which has 42 bipartisan cosponsors.

Delayed by Congress in both 2015 and 2018, the tax would impose a 40 percent excise tax on employer-provided health benefits that exceed certain limits, projected at $11,200 for an individual and $30,100 for a family in 2022.

Read more here: Cadillac Tax/NAHU

HSA Contribution Limit Adjusted to $6,900 for 2018

The Treasury Department and the IRS recently decided, “in the best interest of sound and efficient tax administration,” to adjust the 2018 annual HSA contribution limit to $6,900 for eligible individuals with family coverage under an HDHP, per Rev. Proc. 2017-37.

Individuals who receive a distribution from an HSA oF an excess contribution (with earnings) based on the $6,850 deduction limit published in Rev. Proc. 2018-18 may repay the distribution to the HSA and treat the distribution as the result of a mistake of fact due to reasonable cause under Q&A-37 of Notice 2004-50, 2004-2 C.B. 196.

Alternatively, individuals who receive a distribution from an HSA of an excess contribution (with earnings) based on the $6,850 deduction limit published in Rev. Proc. 2018-18 and does not repay the distribution to the HSA may treat the distribution in accordance with section 223(f)(3), which describes the treatment of excess contributions returned before the due date of return. Thus, the excess contribution generally would not be included in gross income under section 223(f)(2) or subject to the 20 percent additional tax under section 223(f)(4), provided the distribution is received on or before the last day prescribed by law (including extensions of time) for filing the individual’s 2018 tax return.

 

Click here to read Rev. Proc. 2018-27.

Judge Grants Class-Action Lawsuit Regarding CSRs

In October 2017, the Trump administration announced they would no longer make Cost-Sharing Reduction (CSR) payments to insurers. On April 23, BenefitsPro reported that, in a win for insurers, Judge Margaret Sweeney of the U.S. Court of Federal Claims has granted a Wisconsin-based insurer’s request for class-action status.

The government has challenged the request and is expected to appeal the class action status to avoid billions in CSRs if it loses in court.

Click here for more information.

Transitional Policies for Non-ACA Compliant Plans to be Extended Through 2019

The Center for Consumer Information and Insurance Oversight (CCIIO) recently issued an Insurance Standards Bulletin that extends the CCIIO’s transitional policy through 2019, provided that all policies begin on or before October 1, 2019, and end by December 31, 2019.

As with previous transitional policies, this policy applies to non-grandfathered health insurance plans in the individual and small group markets that would otherwise terminate or require modification as a result of the federal health insurance market reforms required under the Patient Protection and Affordable Care Act (ACA).

For more information, click here.

CMS Releases HHS Notice of Benefit and Payment Parameters for 2019

CMS recently issued the HHS Notice of Benefit and Payment Parameters for 2019, generally for plan years beginning on or after January 1, 2019. The rule is designed to improve affordability for those with high premiums.

The rule includes provisions in the following key areas:

  • Essential Health Benefits (EHB)
  • Qualified Health Plan (QHP) Certification Standards
  • Exemptions
  • Risk Adjustment
  • Advance Premium Tax Credit (APTC) Program Integrity
  • Special Enrollment Periods (SEPs)
  • Medical Loss Ratio
  • Small Business Health Options Program (SHOP)
  • Rate Review

In addition, CMS has extended the transitional policy for one additional year, allowing for the transition to fully ACA-compliant coverage in the individual and small group Health Insurance Marketplaces until 2019.

Click here for more information or contact your Cornerstone representative.

 

ADDITIONAL RESOURCES

States face challenge in curbing premiums after stabilization package fails

CMS issues final 2019 Payment Notice Rule to increase access to affordable health plans for Americans suffering from high Obamacare premiums

QSEHRA Updates

The IRS has issued Notice 2017-67, which contains 59 pages of guidance related to Qualified Small Employer Health Reimbursement Arrangements. The guidance covers the following topics:

  1. Eligible employer
  2. Eligible employee
  3. Same terms requirement
  4. Statutory dollar limits
  5. Written notice requirement
  6. MEC requirement
  7. Proof of MEC requirement
  8. Substantiation requirement
  9. Reimbursement of medical expenses
  10. Reporting requirement
  11. Coordination with PTC
  12. Failure to satisfy the requirements to be a QSEHRA
  13. Interaction with HSA requirements
  14. Effective date

Additionally, the Notice also includes model attestations. Cornerstone will provide updates on what the latest guidance means for brokers as we unpack this new information.

Federal Judge Rejects Democratic Bid to Block Ending CSRs

Recently, President Trump issued an executive order designed to draw people away from the ACA markets. That same day, the administration announced they would no longer make Cost-Sharing Reduction (CSR) payments to insurers.

On October 25, U.S. District Judge Vince Chhabria in San Francisco rejected a bid by Democratic state officials to temporarily block the White House from ending cost-sharing reduction payments to health insurers under the ACA. The goal of the coalition of 19 Democratic attorneys general was to force the federal government to make payments that would help insurance companies lower out-of-pocket costs for low-income policyholders.

 

RESOURCES

Federal Judge Upholds Order to End Cost-Sharing Reduction Subsidies