Medicare & Employers
Medicare is a federal health insurance
program- funded in part by employers through a payroll tax- that is
divided into four parts. Part A is hospital insurance; Part B is medical
insurance; Part C is Medicare Advantage; and Part D is prescription
Special Update: Medicare is no longer prevented from recognizing same-sex marriages for determining entitlement to, or eligibility for, Medicare.
The Social Security Administration is now processing requests for
Medicare Part A and Part B Special Enrollment Periods, as well as
reductions in late enrollment penalties, for certain eligible
individuals in same-sex marriages. Click here for more information.
Medicare Payroll Tax
Through the FICA payroll tax, employers and employees fund Medicare's Hospital Insurance (HI) program.
- Tax rates under the HI program are 1.45% for employees and employers, each, and 2.90% percent for self-employed persons.
Employer Notice Requirements under Medicare Part D (Creditable Coverage)
- The Medicare Modernization Act (MMA) requires entities (whose
policies include prescription drug coverage) to notify Medicare eligible
policyholders whether their prescription drug coverage is creditable
coverage, which means that the coverage is expected to pay, on average,
as much as the standard Medicare prescription drug coverage. For these
entities, there are two disclosure requirements:
- The first disclosure requirement is to provide a written disclosure notice
to all Medicare eligible individuals annually who are covered under its
prescription drug plan, prior to October 15th each year and at various
times as stated in the regulations, including to a Medicare eligible
individual when he/she joins the plan. This disclosure must be provided
to Medicare eligible active working individuals and their dependents,
Medicare eligible COBRA individuals and their dependents, Medicare
eligible disabled individuals covered under your prescription drug plan
and any retirees and their dependents. The MMA imposes a late enrollment
penalty on individuals who do not maintain creditable coverage for a
period of 63 days or longer following their initial enrollment period
for the Medicare prescription drug benefit. Accordingly, this
information is essential to an individual's decision whether to enroll
in a Medicare Part D prescription drug plan.
- The second disclosure requirement is for entities to complete the Online Disclosure to CMS Form
to report the creditable coverage status of their prescription drug
plan. The Disclosure should be completed annually no later than 60 days
from the beginning of a plan year (contract year, renewal year), within
30 days after termination of a prescription drug plan, or within 30 days
after any change in creditable coverage status.
Medicare Model Disclosure Notices
- Disclosure to CMS Guidance and Instructions
- Disclosure to CMS (Online) Form
- Model Individual Creditable Coverage Disclosure Notice (PDF)
- Model Individual Creditable Coverage Disclosure Notice - Spanish (PDF)
- Model Individual Non-Creditable Coverage Disclosure Notice (PDF)
- Model Individual Non-Creditable Coverage Disclosure Notice - Spanish (PDF)
For additional information, see the CMS Medicare pages.