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CareersEmployee Benefits Compliance: Medicare Part D Disclosures & Gag Clause Attestations: What Employers Need to Know
Outlined below are summaries of two important employee benefits compliance deadlines coming up in the fourth quarter. If you have questions regarding either update, contact your North Risk Partners employee benefits team.
Medicare Part D Disclosures Due by Oct. 15, 2024
Employers sponsoring any size group health plan that provides prescription drug coverage are not required to offer creditable coverage, but they are required to determine whether the prescription drug coverage is creditable and then must communicate creditable or non-creditable coverage status annually to eligible employees and their family members and to the Centers for Medicare & Medicaid Services (CMS).
The notice is required to be provided to Medicare Part D eligible individuals by Oct. 15, 2024.
Who is Entitled to Receive the Disclosure?
The notice must be provided to Medicare Part D eligible individuals who are eligible to enroll in the plan sponsor’s prescription drug plan. This includes employees, COBRA participants, and retirees, as well as their spouses and dependents. Since it may be difficult for a plan sponsor to identify which individuals are eligible for Medicare Part D (e.g., spouses or disabled dependents), many plan sponsors choose to provide the disclosure notice to everyone who is eligible to enroll in their prescription drug plan.
Method of Delivery for the Disclosure
When providing the notices, CMS prefers using paper documents because Medicare Part D eligible individuals are more likely to receive and understand them, and because it is easier to ensure that paper documents have been received by both employees and eligible spouses and dependents.
However, the notices may be sent electronically in accordance with the Department of Labor’s (DOL’s) electronic delivery safe harbor for required ERISA disclosures (i.e., to those who have access to the employer’s electronic system as an integral part of their daily duties at their regular workplace, and to those who provide consent to an electronic distribution).
Health Plans Must Submit Gag Clause Attestations by Dec. 31, 2024
The Consolidated Appropriations Act, 2021 (CAA) amended the Employee Retirement Income Security Act (ERISA), the Public Health Services Act (PHSA), and the Internal Revenue Code to prohibit group health plans and health insurance carriers from entering into agreements with providers, TPAs, or other service providers that include language that would constitute a “gag clause” (i.e., contract provisions that restrict specific data and information that a plan can make available to another party).
Plans and issuers must annually submit an attestation of compliance with these requirements. The first attestations were due December 31, 2023 (attesting to compliance for 2021 – 2023). Subsequent attestations are due by December 31 of each year thereafter.
Which Plans Must Comply?
The gag clause prohibition and attestation requirements apply to virtually all employer-sponsored health plans, but not excepted benefits (e.g., stand-alone dental or vision, health FSA) or account-based plans (e.g., HRAs).
Who Must Complete the Attestation?
Agency guidance indicates that carriers or TPAs may attest for the group health plan on behalf of sponsoring employers, but carriers and TPAs are taking a varied approach as to their willingness to attest on behalf of employers.
Attestation Process Overview
The attestation requirement is a fairly straightforward process, requiring only some plan identifying information, employer contact information, and a checked box and signature to indicate compliance. This is all done via a website portal. The website for submitting the attestation can be found here »
Action Steps for Employers
Employers should contact any carriers, TPAs, PBMs, or other service providers with contracts or agreements connected to their group health plans to determine whether the attestation will be handled by such service providers. If not, the employer should confirm compliance with the service providers and then attest to such compliance on behalf of the group health plan using the process described above. The attestation must be submitted no later than December 31, 2024.
If you have questions related to this update, please contact your North Risk Partners advisor. Don’t have an advisor? No problem. We’ll help you find one.
This regulatory update is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice.