The Medicare Modernization Act requires all employers to complete an Online Disclosure to the Centers of Medicare and Medicaid Services (CMS) to report the creditable coverage status of their prescription drug plan.

The Online Disclosure should be completed annually no later than 60 days from the beginning of the plan year. This means that employers with calendar year plans that begin on January 1st, must complete reporting by March 1st.


Which employers must complete the Online Disclosure?  

Employers who sponsor group health care plans with prescription drug coverage.


What does “creditable coverage” mean?

Prescription drug coverage is “creditable” if it is expected to pay, on average, as much as the standard Medicare prescription drug coverage (Medicare Part D); otherwise, it is “non-creditable.” Employers are reporting to CMS whether the plans they sponsor have prescription drug coverage that is at least “as good as” Medicare Part D coverage. For more on creditable coverage, see the CMS website.


When do employers need to complete the Online Disclosure?

Employers must complete the Online Disclosure:

  • annually within 60 days of the beginning of the plan year;
  • within 30 days after termination of a prescription drug plan; and
  • within 30 days after any change in creditable coverage status.


How can employers complete the Online Disclosure?

Employers can complete the Online Disclosure on the CMS website. The Online Disclosure can be completed here.


Employer Action Items

  • Employers should ensure the Online Disclosure to CMS is completed within 60 days of the start of the plan year. The deadline for employers with calendar year plans is March 1st. The Online Disclosure can be completed here.
  • Once the Online Disclosure to CMS is completed, it is recommended that you take a screenshot or save the confirmation page for your records.
  • Sequoia and Sequoia Tech Program Clients Only: Be on the lookout for an e-mail from your Client Service Manager with the Online Disclosure instructions and information about the creditable status of your plan toward the beginning of your plan year.


Additional Resources

Additional information is available on the CMS website. Please also refer to the Disclosure to CMS Guidance and Instructions.


The information and materials on this blog are provided for informational purposes only and are not intended to constitute legal or tax advice. Information provided in this blog may not reflect the most current legal developments and may vary by jurisdiction. The content on this blog is for general informational purposes only and does not apply to any particular facts or circumstances. The use of this blog does not in any way establish an attorney-client relationship, nor should any such relationship be implied, and the contents do not constitute legal or tax advice. If you require legal or tax advice, please consult with a licensed attorney or tax professional in your jurisdiction. The contributing authors expressly disclaim all liability to any persons or entities with respect to any action or inaction based on the contents of this blog.

Emerald Law – Emerald is a Client Compliance Consultant for Sequoia, where she works with our clients to optimize and streamline benefits compliance. In her free time, Emerald enjoys stand-up comedy, live music and writing non-fiction.