>The new guidance, issued by the US Centers for Medicare and Medicaid Services, provides safe harbors under which employers’ prescription drug plans automatically would be considered equal to Medicare coverage, according to a Business Insurance report. That would eliminate the need for employers to hire an actuary to determine whether the plans are at least equal to the Medicare coverage.
>Under the requirement, by November 15, employers will have to provide every participant in their health care plans who is eligible for Medicare – primarily those age 65 and older – with a notice about whether the prescription drug benefits provided by the employer are at least equal to the drug benefits that will be available under Medicare Part D. Coverage that is equal to Part D is considered “creditable.” If the employer coverage is creditable, employees can delay enrolling in Part D after becoming eligible without incurring a late-enrollment penalty, according to the report.
>To meet the safe harbor, an employer plan would have to offer coverage for brand-name and generic prescriptions; provide reasonable access to retail providers and, optionally, to mail order coverage, Business Insurance said. The coverage would be designed to pay, on average, 60% of participants’ prescription drug expenses.
>An employer plan also would have to meet at least one of two other thresholds. To qualify under one test, the prescription drug benefit plans would either have to cover at least $25,000 in claims a year or not impose an annual dollar limitation on the amount of claims covered. The second test provides that the plan would have to have an actuarial expectation that the amount payable by the plan would be at least $2,000 per Medicare-eligible individual in 2006.
>For prescription drug plans that are integrated with other health care benefits, such as with medical and dental care, the integrated health plan could not have an annual deductible greater than $250, would have to have an annual maximum benefit cap of at least $25,000 and no less than a $1 million lifetime combined benefit maximum.
>The guidance also provides model notices, which employers can adopt virtually verbatim, for informing Medicare-eligible employees whether their employers’ prescription drug benefit program is creditable coverage, according to the report.