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Part D Insurance
Humana Part D

Licensed Medicare Part D agents represent virtually every insurer in the United States. No one knows the rules and regulations of the Medicare industry better than the local insurance agent.

Medicare Insurance Plans

Medicare Part D Benefit Model Employer

part d donut hole

A Medicare Part D benefit model employer

What a Medicare Part D benefit model employer? Essentially, they are employers who provide Disclosure Notices to their active and retired employees on whether or not their healthcare coverage is creditable under Medicare Part D.

It’s not as simple as it sounds. In actual practice, employers may need to enlist the help of Part D compliance professionals (in most cases, law firms). For one thing, there are many laws governing health programs, including HIPAA, ERISA, COBRA, Medicare Part D, FMLA, ADA, and the ADEA.

Through the myriad of laws, companies that sponsor group healthcare plans need to determine if the plan they’re offering is creditable under Part D. Assessing if a plan coverage is creditable done two ways:

1. Determining the actuarial value of a plan if it equals or exceeds the value of a standard Part D plan,

2. Through an alternative valuation method based on certain criteria, including:

Of course, for the alternative valuation method, the Centers for Medicare and Medicaid Services (CMS) has other criteria for creditable that should be satisfied. Since determining creditable coverage through actuarial value is expensive and time-consuming, evaluation by actuaries is only done if employers are applying for 28% subsidy from CMS.

Whether or not their coverage is creditable or not, under CMS guidelines employers need to make sure that they provide Disclosure Notices to their employees (active or retired) and their beneficiaries indicating whether or not their current health plan is creditable. Employers can fill out and send out CMS model notices, or they can write and send out customized notices to all their active and retired employees and their dependents.

Just when should employers send out Disclosure Notices?

  • twelve (12) months prior to the Medicare Part D election period,
  • twelve (12) months prior to the employee’s initial enrolment for Part D,
  • twelve (12) months prior to a Part D plan’s effective date of coverage,
  • when the creditable coverage is no longer creditable.

Determining whether a healthcare coverage is creditable or not under Part D is important. If you enroll past the enrolment period, you will need to pay the penalty on top of the premium.

When you enroll beyond the enrolment and you do not have creditable coverage, you will need to pay the penalty equivalent to 1% of the Part D plan’s premium for every month without creditable coverage.

There are many Part D plans that you can have. In some states there can be as many as 100 Part D plans being offered by 50 different plan providers, each with different rates. Although they offer more or less the same thing, these plans vary in certain factors such as their formularies or the list of generic and brand name prescription drugs that they cover. They also differ in their coverage amount.