What Are the Obligations Under Medicare Part D Program?

Medicare Part D plans come in different forms: HMO plans, PPO plans, Program of All-Inclusive Care for the Elderly (PACE) plans, and Medicare Private-Fee-for-Service plans. Enrollment for the 2011 Part D doesn't start until November 15, 2010 (it ends December 31, 2010).

You can enjoy the benefits of your Part D plan right away at the beginning of 2009. If you decide on a Medicare Advantage Plan during the enrollment period but would like to switch to a PDP plan at the start of 2011, you can always make the switch from January 1 to March 31, 2010, during a special enrolment period.

Under the Medicare Part D program, employers in the United States have certain obligations, regardless of whether or they provide medical benefits for retirees. And it isn't just about providing Disclosure Notices to their active and retired employees. Disclosure Notice Defined

Disclosure Notice is an indication of whether or not the medical benefit that an employee provides is CREDITABLE or not. Determining if a coverage is creditable or not is critical - if Medicare beneficiaries decide to enroll past the enrolment period, they will have to pay the penalty if they didn't have creditable coverage.

Creditable coverage includes coverage under a health plan not followed by a break in coverage of 63 days. Strictly speaking, a health coverage plan only becomes creditable if the so-called "actuarial value" of the health plan coverage is equal to, or exceeds, the value of a standard Medicare Part D plan.

A Disclosure Notice must be provided to employees

(a) twelve months before the election of period of Part D,

(b) twelve months before the employee's initial enrolment period for Part D coverage,

(c) twelve months before a Part D plan's effective date of its coverage,

(d) whenever the creditable coverage of the individual no longer becomes creditable.

However, since calculating the actuarial value is expensive and time-consuming, the Centers for Medicare and Medicaid Services (CMS) has an alternative way of determining if an existing healthcare coverage is creditable under a Part D plan. To be determined as creditable, a drug coverage plan must meet these requirements:

* Covers generic prescription drugs and brand name prescription,

* Gives recipients reasonable access to drug retailers and optionally provide mail order coverage,

* Pays at least 60% of the beneficiaries' expenses for prescription drugs, and

* At least satisfies one of the following:

The prescription drug benefit does not have a maximum annual benefit or a payable annual benefit of at least $25,000, the plan's payable amount is at least $2,000 for every Medicare-eligible person in 2006.

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