Medicare Part D Changes Confuse Employers
From MLive.com:
Medicare’s new prescription drug benefit - which starts Jan. 1 - is giving many companies a headache as they scramble to decipher the guidelines.
In fact, some employers - either because they’re unprepared or unaware - will likely miss the Nov. 15 deadline to send eligible employees, retirees and dependants a notice that essentially defines the company’s drug plan as better or worse than the Medicare Part D plan.
And that could cost employees higher premiums if and when they do subscribe to the Medicare plan. “My guess is that there is going to be many, many employers who don’t send out the notice to their employees,” said Mark Nixon, president of Royal Oak-based Allied Group Insurance Services Inc. of Michigan.
Nixon and his staff have been working with many of Allied Group’s 450 business clients to interpret and meet the requirements of Part D, which was signed into law in 2003. The plan - expected to cost the government $724 billion over the next decade - offers prescription drug benefits to the 42 million people on Medicare, most of whom are 65 and older.
The law requires employers with any Medicare-eligible plan participants to send a notice every year to these participants outlining whether the company’s drug plan is “creditable” or “non-creditable” - in other words, whether it is of lesser or greater value than Part D.
The notice must be sent to eligible active employees and retirees as well as their spouses and dependent children.
The value determination is based on a complicated actuarial formula that employers can’t make without guidance from their prescription drug provider - and many providers dragged their feet in providing the information, said Sue Mathiesen, director of technical services for Troy-based McGraw Wentworth, a group benefit brokerage and consulting firm.
It is really going to be interesting to see how everything plays out with all this confusion. We’re less than two weeks away from the beginning of Medicare Part D Enrollment. Fortunately everyone has a few months to enroll before the rate increases begin.