Compliance Update: Medicare Part D Reporting to CMS and IRS Announces Lactation Supplies Qualify as Medical Care Expenses
Medicare Part D
In follow up to our November 3, 2010, compliance update, we would like to remind our clients with calendar year plans that the deadline to report the status of prescription drug coverage to the Centers for Medicare and Medicaid Services (CMS) is approaching. To comply with federal regulations under Medicare Part D, any employer offering prescription drug coverage to its employees must send two notices relating to prescription drug coverage. The notices require employers to:
1. Provide written notification to plan participants explaining whether the coverage is "creditable" or "non-creditable" prior to November 15th
2. Notify the Centers for Medicare & Medicaid Services (CMS) about the status of its drug coverage no later than 60 days after the start of its plan year
For our clients with calendar year plans, you must complete your disclosure to CMS by March 1st. Disclosure of your plan status to CMS can be completed at www.cms.gov/CreditableCoverage/45_CCDisclosureForm.asp. In addition to the annual disclosure requirements, groups must submit a new disclosure within 30 days after any change to a plan's creditable coverage status.
Model notices for disclosure of plan status to participants are available at https://www.cms.gov/CreditableCoverage/. If you have a plan that is not a calendar year plan or need assistance determining whether your plan is "creditable" or "non-creditable", please contact your HORAN representative for assistance.
Lactation Expenses as Medical Expenses
The Internal Revenue Service has announced that breast pumps and supplies that assist lactation are a medical expense under Section 213(d) of the Internal Revenue Code. For employers offering flexible spending accounts, health reimbursement arrangements, or health savings accounts, these items can now be treated as reimbursable expenses without regard to medical condition and without requiring a physician prescription.
This also means that these items are deductible medical expenses for taxpayers if total medical expenses exceed 7.5 percent of adjusted gross income.
The IRS announcement can be found at http://www.irs.gov/pub/irs-drop/a-11-14.pdf.
For additional information, please contact your HORAN representative.