<nobr>Jan 4, 2006</nobr>

CMS Info on Part D Auto-Enrollees

December 29, 2005
CMS Issues Information for Employers on Retirees' Medicare Part D Auto-Enrollment

Attached to this message, please find two documents CMS just circulated concerning the status of retirees who may be automatically enrolled in Medicare Part D prescription drug coverage, and how this could affect their employer-provided retiree health benefits. There are also a few additional issues concerning Part D that major employers should be aware of, which are as follows:

• While CMS has an electronic notification system to flag seniors who sign up for Part D, including those who are automatically enrolled, the system is not perfect and some enrollees may not show up on plan-sponsors' Retiree Drug Subsidy accounts until after January 1st. Some states will not finish their automatic enrollment procedures until after January 1st. Overall, CMS wants employers to be aware that there is a need for flexibility in dealing with Part D and employer retiree plan disenrollments for several months.
• Over the next several weeks there will be an increasing sense of urgency on the part of retirees - they will have received several missives indicating that their coverage may cease on January 1st if they have not enrolled in Part D. Plan-sponsors should expect a much higher level of interaction with concerned retirees over the next few weeks.
• If plan-sponsors are not flexible during the next few weeks, when the critical implementation takes place and millions of retirees switch to Part D, we should expect both negative media coverage and lawsuits alleging that employers provided inadequate and ineffective notice. This is a very stressful issue for retirees, and the weeks ahead could be very tense.

58A80000000F.filename.Employer_Union_Plans_and_Auto_Facilitated_Enrollment_TIP_SHEET_12272005.pdf

589E00000026.filename.Employer_Union_Plans_and_Autoenrollment_ISSUE_PAPER_12272005.pdf

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