Five Stories That Matter in Michigan This Week – February 16, 2024

  1. Michigan Eliminates Pharmaceutical Company Immunity

Governor Whitmer recently signed Senate Bill 410 into law, which repeals the provision under Michigan’s Product Liability Act which granted immunity to pharmaceutical companies. A rebuttable presumption of non-liability and caps on non-economic damages remain intact.

Why it Matters: Pharmaceutical companies have had near-total immunity from product liability claims in Michigan for approximately 30 years. The law took effect on February 13, 2024.

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  1. Retroactive PPT Exemption

Some Michigan manufacturers who were not able to claim their 2021 ESA-PPT exemption due to COVID-19, have until March 14 to request approval from the State Tax Commission.

Why it Matters: The ESA is a State specific tax on personal property that is exempt from property taxes at the local level because the property meets certain eligibility requirements, such as being qualified manufacturing or industrial personal property. In order to elect out of local personal property taxes and into the ESA regime, manufacturers must file the required forms with their local assessing office by February 20th of each year. Learn more.

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  1. Michigan’s Repealed “Right-to-Work” Law Takes Effect

On Tuesday, February 13, 2024, Michigan’s repeal of the prior “right-to-work” law governing private-sector workers went into effect.

Why it Matters: The result of the repeal is that private-sector unions may permissibly negotiate to impasse, and enforce, “union security” provisions requiring membership in, or financial support through “Beck Objector” fees, of those unions. Read more.

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  1. Michigan Cannabis Exceeds $242 Million in January ‘24

Cannabis sales surpassed $242 million in January, via the monthly report from the Michigan Cannabis Regulatory Agency. Michigan adult-use sales came in at $240,289,360.60, while medical sales came in at $2,523,333.56, totaling $242,812,694.16.

Why it Matters: Marijuana sales remain strong in Michigan, particularly for recreational use. However, there still are significant concerns about profitability and market oversaturation that the industry is contending with.

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  1. Client Alert/Reminder: Form W-2 Reporting Due for Employer-Provided Health Care / Disclosure Due to CMS for Medicare Part D

Unless subject to an exemption, employers must report the aggregate cost of employer-sponsored health coverage provided in 2023 on their employees’ Form W-2 (Code DD in Box 12) issued in January 2024. Please see IRS Notice 2012-09. Additionally, group health plans offering prescription drug coverage are required to disclose to all Part D-eligible individuals who are enrolled in or were seeking to enroll in the group health plan coverage whether such coverage was creditable.

Why it Matters: The filing deadline is 60 days following the first day of the plan year. If you operate a calendar year plan, the deadline is the end of February. If you operate a non-calendar year plan, please be sure to keep track of your deadline. Contact your Fraser Trebilcock attorney for any questions.

Related Practice Groups and Professionals

Business & Tax | Paul McCord
Labor, Employment & Civil Rights | David Houston
Cannabis Law | Sean Gallagher
Employee Benefits | Bob Burgee
Employee Benefits | Sharon Goldzweig

Client Alert/Reminder: Form W-2 Reporting Due for Employer-Provided 
Health Care / Disclosure Due to CMS for Medicare Part D

Upcoming Deadlines: (1) Form W-2 Reporting of Employer-Provided Health Coverage; and (2) Medicare Part D Notices to CMS

Reminder: Form W-2 Reporting on Aggregate Cost of Employer Sponsored Coverage

Unless subject to an exemption, employers must report the aggregate cost of employer-sponsored health coverage provided in 2023 on their employees’ Form W-2 (Code DD in Box 12) issued in January 2024. Please see IRS Notice 2012-09.

The following IRS link is helpful and includes a chart setting forth various types of coverage and whether reporting is required; see here.

Please note this is a summary only and Notice 2012-09 should also be consulted. The IRS has issued questions and answers regarding reporting the cost of coverage under an employer-sponsored group health plan, which can be found here.

If you have questions regarding whether you or your particular benefits are subject to reporting, please feel free to contact us.

Deadline Coming Up for Calendar Year Plans to Submit Medicare Part D Notice to CMS

As you know, group health plans offering prescription drug coverage are required to disclose to all Part D-eligible individuals who are enrolled in or were seeking to enroll in the group health plan coverage whether such coverage was “actuarially equivalent,” i.e., creditable. (Coverage is creditable if its actuarial value equals or exceeds the actuarial value of standard prescription drug coverage under Part D). This notice is required to be provided to all Part D eligible persons, including active employees, retirees, spouses, dependents and COBRA qualified beneficiaries.

The regulations also require group health plan sponsors with Part D eligible individuals to submit a similar notice to the Centers for Medicare and Medicaid Services (“CMS”). Specifically, employers must electronically file these notices each year through the form supplied on the CMS website.

The filing deadline is 60 days following the first day of the plan year. If you operate a calendar year plan, the deadline is the end of February. If you operate a non-calendar year plan, please be sure to keep track of your deadline.

At a minimum, the Disclosure to CMS Form must be provided to CMS annually and upon the occurrence of certain other events including:

    1. Within 60 days after the beginning date of the plan year for which disclosure is provided;
    2. Within 30 days after termination of the prescription drug plan; and
    3. Within 30 days after any change in creditable status of the prescription drug plan.

The Disclosure to CMS Form must be completed online at the CMS Creditable Coverage Disclosure to CMS Form web page found here.

    1. The online process is composed of the following three step process: Enter the Disclosure Information;
    2. Verify and Submit Disclosure Information; and
    3. Receive Submission Confirmation.

The Disclosure to CMS Form requires employers to provide detailed information to CMS including but not limited to, the name of the entity offering coverage, whether the entity has any subsidiaries, the number of benefit options offered, the creditable coverage status of the options offered, the period covered by the Disclosure to CMS Form, the number of Part D eligible individuals, the date of the notice of creditable coverage, and any change in creditable coverage status.

For more information about this disclosure requirement (including instructions for submitting the notice), please see the CMS website for updated guidance found here.

As with the Part D Notices to Part D Medicare-eligible individuals, while nothing in the regulations prevents a third-party from submitting the notices (such as a TPA or insurer), ultimate responsibility falls on the plan sponsor.

This email serves solely as a general summary of the Form W-2 reporting requirements and CMS disclosure for Medicare Part D.


Robert D. Burgee is an attorney at Fraser Trebilcock with over a decade of experience counseling clients with a focus on corporate structures and compliance, licensing, contracts, regulatory compliance, mergers and acquisitions, and a host of other matters related to the operation of small and medium-sized businesses and non-profits. You can reach him at 517.377.0848 or at bburgee@fraserlawfirm.com.


Attorney Sharon GoldzweigSharon Goldzweig is Of Counsel at Fraser Trebilcock, specializing in matters pertaining to employee health and welfare benefits. In a field where the laws are constantly changing, Sharon is constantly looking out for anything that might involve her clients including changes to ERISA and other federal laws. She can be reached at sgoldzweig@fraserlawfirm.com, or at 718.808.5140.

Five Stories That Matter in Michigan This Week – February 9, 2024

  1. Reinstatement of Michigan’s Prevailing Wage Act Takes Effect February 13

On March 24, 2023, Governor Whitmer signed into law a bill reinstituting Michigan’s Prevailing Wage Act (the “Act”). The new Act, which takes effect February 13, 2024, will require every contractor and subcontractor in Michigan to pay the prevailing wage and benefit rates to employees working on most state funded construction projects.

Why it Matters: Contractors that fail to pay prevailing wages may have their contract terminated, be required to pay any excess costs incurred by the state for contracting with a new employer, and be fined up to $5,000.

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  1. A Health Professional’s Guide to Navigating the Disciplinary Process: What to Expect if You Are Facing a Professional Licensing Investigation or Administrative Complaint

Health professionals are committed to caring for patients with expertise, compassion, and integrity. However, in the heavily regulated healthcare field, those professionals can sometimes find themselves navigating not just the medical challenges of their patients but licensing issues of their own as well. Licensing issues can arise unexpectedly, and, when they do, they can cause tremendous stress and uncertainty.

Why it Matters: As an attorney with years of experience handling professional licensing matters for health professionals, Robert J. Andretz has witnessed firsthand how professional licensing investigations and Administrative Complaints can disrupt health professionals’ careers and their ability to provide patient care. He will explore how to navigate the disciplinary process in Michigan so that you can know what to expect if you are ever faced with a threat to your license. Learn more.

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  1. Fraser Trebilcock Welcomes Robert J. Andretz to the Firm

We are pleased to announce the hiring of attorney ​Robert J. Andretz who will work primarily in the firm’s Lansing office.

Why it Matters: Helping clients for more than two decades, Rob is an experienced criminal defense and professional licensing attorney who has successfully represented clients in both state and federal courts in felony and misdemeanor cases in more than 50 counties across the state of Michigan. He is passionate about what he does, and, understanding the direct and collateral consequences that a criminal conviction or professional licensing sanction can bring, he compassionately works with his clients to focus on what matters most to them. Learn more.

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  1. Understanding How Trademarks, Copyrights, and Patents Protect Your Business

Copyright is the exclusive legal protection that covers an original work of authorship. Copyrights vest upon creation of the work, which means placing the work onto a tangible medium.

Why it Matters: Similar to trademark law, it can be difficult to enforce your copyright if the work is not registered with the U.S. Copyright Office. Learn more on this series about trademarks, copyrights, and patents from Fraser Trebilcock attorney Andrew Martin.

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  1. Client Alert/Reminder: Form W-2 Reporting Due for Employer-Provided Health Care / Disclosure Due to CMS for Medicare Part D

Unless subject to an exemption, employers must report the aggregate cost of employer-sponsored health coverage provided in 2023 on their employees’ Form W-2 (Code DD in Box 12) issued in January 2024. Please see IRS Notice 2012-09. Additionally, group health plans offering prescription drug coverage are required to disclose to all Part D-eligible individuals who are enrolled in or were seeking to enroll in the group health plan coverage whether such coverage was creditable.

Why it Matters: The filing deadline is 60 days following the first day of the plan year. If you operate a calendar year plan, the deadline is the end of February. If you operate a non-calendar year plan, please be sure to keep track of your deadline. Contact your Fraser Trebilcock attorney for any questions.

Related Practice Groups and Professionals

Labor, Employment & Civil Rights | David Houston
Professional Licensing | Robert Andretz
Intellectual Property | Andrew Martin
Employee Benefits | Bob Burgee
Employee Benefits | Sharon Goldzweig

Five Stories That Matter in Michigan This Week – January 26, 2024

  1. Michigan Amendment Imposes Reporting Requirement for Broker-Dealers and Investment Advisers to Report Financial Exploitation of Vulnerable Adults

Effective March 13, 2024, an amendment to the Michigan Uniform Securities Act (new Section 451.2533) will take effect that is intended to protect elder and vulnerable adults from financial exploitation. Among other things, the law requires broker-dealers and state-registered investment advisers to report suspected financial exploitation to a law enforcement agency or adult protective services.

Why it Matters: According to the Michigan Department of Attorney General website, more than 73,000 older adults in Michigan are victims of elder abuse, including financial exploitation.

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  1. The DOL Issues Final Rule Creating New Standard for Classifying Workers as Employees vs. Independent Contractors

On January 9, 2024, the United States Department of Labor released its final rule on worker classification under the Fair Labor Standards Act (FLSA).

Why it Matters: This new rule, effective as of March 11, 2024, signals a return to a standard more likely to classify workers as employees than contractors. Thus, it is more likely that employers will be determined to have misclassified workers as contractors, resulting in liability. Learn more from your Fraser Trebilcock attorney.

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  1. Michigan Federal Judge Dismisses Complaint Against Firm Client

A Michigan federal judge recently dismissed a complaint against the firm’s client represented by attorneys Thaddeus E. Morgan and Ryan K. Kauffman, for lack of subject matter jurisdiction.

Why it Matters: The complaint alleged that the firm’s client, together with another state bar, illegally conspired to prevent the plaintiff from practicing law in their respective states. However, the Eleventh Amendment prohibits a suit brought in federal court against a state, its agencies and officials, unless the state has waived its sovereign immunity or consented to being sued. The Eleventh Amendment limits federal subject matter jurisdiction, and as a result of the state bar functioning as an extension of the state’s Supreme Court, it is a state agency that possesses Eleventh Amendment immunity. Read more.

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  1. Michigan Cannabis Sales Eclipse $3 Billion in 2023

Michigan cannabis sales total $3,057,161,285.85, via the collection of monthly reports from the Michigan Cannabis Regulatory Agency. This is a 30% increase from 2022, which saw total sales at $2,293,823,890.11.

Why it Matters: Marijuana sales remain strong in Michigan, particularly for recreational use. However, there still are significant concerns about profitability and market oversaturation that the industry is contending with.

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  1. Client Alert: PCORI Fees Due by July 31, 2024!

In Notice 2023-70, the Internal Revenue Service set forth the PCORI amount imposed on insured and self-funded health plans for policy and plan years that end on or after October 1, 2023, and before October 1, 2024.

Why it Matters: Notice 2023-70 sets the adjusted applicable dollar amount used to calculate the fee at $3.22. Specifically, this fee is imposed per average number of covered lives for plan years that end on or after October 1, 2023, and before October 1, 2024. For self-funded plans, the average number of covered lives is calculated by one of three methods: (1) the actual count method; (2) the snapshot method; or (3) the Form 5500 method. Learn more from your Fraser Trebilcock attorney.

Related Practice Groups and Professionals

Labor, Employment & Civil Rights | David Houston
Litigation | Ryan Kauffman
Litigation | Thaddeus Morgan
Cannabis Law | Sean Gallagher
Employee Benefits | Bob Burgee
Employee Benefits | Sharon Goldzweig

Five Stories That Matter in Michigan This Week – January 19, 2024

  1. New Michigan Law Mandates Compulsory Arbitration for Higher Education Police Officers

Michigan’s law regarding compulsory arbitration of public labor disputed has been amended to include higher education institution police officers. The change takes effect on January 22, 2024.

Why it Matters: Higher education institutions should assess the impact the new law may have on their workforce.

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  1. Fraser Trebilcock Welcomes Phyllis Dahl to the Firm

We are pleased to announce the hiring of Phyllis Dahl as the firm’s new Office Manager.

Why it Matters: Ms. Dahl has over three decades of experience in the legal industry, having worked at two private law firms before joining Fraser Trebilcock. She has a bachelor’s degree in public administration from Central Michigan University. Read more.

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  1. Client Alert: PCORI Fees Due by July 31, 2024!

In Notice 2023-70, the Internal Revenue Service set forth the PCORI amount imposed on insured and self-funded health plans for policy and plan years that end on or after October 1, 2023, and before October 1, 2024.

Why it Matters: Notice 2023-70 sets the adjusted applicable dollar amount used to calculate the fee at $3.22. Specifically, this fee is imposed per average number of covered lives for plan years that end on or after October 1, 2023, and before October 1, 2024. For self-funded plans, the average number of covered lives is calculated by one of three methods: (1) the actual count method; (2) the snapshot method; or (3) the Form 5500 method. Learn more from your Fraser Trebilcock attorney.

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  1. Michigan Cannabis Pulls in Nearly $280 Million in December

Cannabis sales are just below $280 million in December, via the monthly report from the Michigan Cannabis Regulatory Agency. Michigan adult-use sales came in at $276,732,645.94, while medical sales came in at $3,177,042.62, totaling $279,909,688.56.

Why it Matters: Marijuana sales remain strong in Michigan, particularly for recreational use. However, there still are significant concerns about profitability and market oversaturation that the industry is contending with.

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  1. CRA Publishes December 2023 Data: Average Price Decreases

Per data released by the Cannabis Regulatory Agency (CRA), the average retail price for adult-use sales of an ounce of cannabis in December was $95.08, a small decrease from $97.51 in November. For the second time, this is an increase to the average price when compared to the year prior, when in December 2022, the average price was $90.68.

Why it Matters: While the prices of cannabis and cannabis-related products continue to decrease and make consumers happy, growers on the other hand are seeing profits decrease resulting in them seeking ways to halt new licenses to be granted in an effort to steady prices. Contact our cannabis law attorneys if you have any questions.

Related Practice Groups and Professionals

Higher Education | Ryan Kauffman
Phyllis Dahl
Employee Benefits | Bob Burgee
Employee Benefits | Sharon Goldzweig
Cannabis Law | Sean Gallagher

Client Alert: PCORI Fees Due by July 31, 2024!

In Notice 2023-70, the Internal Revenue Service set forth the PCORI amount imposed on insured and self-funded health plans for policy and plan years that end on or after October 1, 2023, and before October 1, 2024.

Background

The Patient-Centered Outcomes Research Institute (PCORI) fee is used to partially fund the Patient-Centered Outcomes Research Institute which was implemented as part of the Patient Protection and Affordable Care Act.

The PCORI fees were originally set to expire for plan years ending before October 1, 2019. However, on December 20, 2019, the Further Consolidated Appropriations Act was enacted and extended the fee to plan years ending before October 1, 2029.

The fee is calculated by using the average number of lives covered under a plan and the applicable dollar amount for that plan year. Code section 4375 imposes the fee on issuers of specified health insurance policies. Code section 4376 imposed the fee on plan sponsors of applicable self-insured health plans. This Client Alert focuses on the latter.

Adjusted Applicable Dollar Amount

Notice 2023-70 sets the adjusted applicable dollar amount used to calculate the fee at $3.22. Specifically, this fee is imposed per average number of covered lives for plan years that end on or after October 1, 2023, and before October 1, 2024. For self-funded plans, the average number of covered lives is calculated by one of three methods: (1) the actual count method; (2) the snapshot method; or (3) the Form 5500 method.

Deadline and How to Report

The PCORI fee is due by July 31, 2024, and must be reported on Form 720.

Instructions are found here (see Part II, pages 8-9).

The Form 720 itself is found here (see Part II, page 2).

Form 720, as well as the attached Form 720-V to submit payment, must be used to report and pay the requisite PCORI fee to the IRS. While Form 720 is used for other purposes to report excise taxes on a quarterly basis, for purposes of this PCORI fee, it is only used annually and is due by July 31st of each relevant year.

As previously advised, plan sponsors of applicable self-funded health plans are liable for this fee imposed by Code section 4376. Insurers of specified health insurance policies are also responsible for this fee.

    • For plan years ending on or after October 1, 2019 and before October 1, 2020, the fee is $2.54 per covered life.
    • For plan years ending on or after October 1, 2020 and before October 1, 2021, the fee is $2.66 per covered life.
    • For plan years ending on or after October 1, 2021 and before October 1, 2022, the fee is $2.79 per covered life.
    • For plan years ending on or after October 1, 2022 and before October 1, 2023, the fee is $3.00 per covered life.
    • For plan years ending on or after October 1, 2023 and before October 1, 2024, the fee is $3.22 per covered life.

Again, the fee is due no later than July 31 of the year following the last day of the plan year.

As mentioned above, there are specific calculation methods used to configure the number of covered lives and special rules may apply depending on the type of plan being reported. While generally all covered lives are counted, that is not the case for all plans. For example, HRAs and health FSAs that are not excepted from reporting only must count the covered participants and not the spouses and dependents. The Form 720 instructions do not outline these rules.

More information about calculating and reporting the fees can be found here.

Questions and answers about the PCORI fee and the extension may be found here.

As you are aware, the law and guidance are continually evolving. Please check with your Fraser Trebilcock attorney for the most recent updates.

vThis alert serves as a general summary and does not constitute legal guidance. Please contact us with any specific questions.


Robert D. Burgee is an attorney at Fraser Trebilcock with over a decade of experience counseling clients with a focus on corporate structures and compliance, licensing, contracts, regulatory compliance, mergers and acquisitions, and a host of other matters related to the operation of small and medium-sized businesses and non-profits. You can reach him at 517.377.0848 or at bburgee@fraserlawfirm.com.


Attorney Sharon GoldzweigSharon Goldzweig is Of Counsel at Fraser Trebilcock, specializing in matters pertaining to employee health and welfare benefits. In a field where the laws are constantly changing, Sharon is constantly looking out for anything that might involve her clients including changes to ERISA and other federal laws. She can be reached at sgoldzweig@fraserlawfirm.com, or at 718.808.5140.

Five Stories That Matter in Michigan This Week – October 13, 2023

  1. Cannabis Regulatory Agency Seeks to Update Michigan’s Marihuana Rules

The Michigan Cannabis Regulatory Agency (“CRA”) recently filed a Request for Rulemaking to begin the process of updating Michigan’s Marihuana Rules. The CRA is asking for feedback—comments or suggestions can be sent to CRA-AdminRules@michigan.gov.

Why it Matters: The proposed updates, a summary of which can be found here, would impact licensing, social equity, financial compliance, and a host of other issues.

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  1. Client Alert: October 14 Deadline: Medicare Part D Notice of Creditable (or Non-Creditable) Coverage

Medicare Part D notices (of either creditable or non-creditable coverage) are due for distribution prior to October 15th.

Why it Matters: With respect to group health plans including prescription coverage offered by an employer to any Medicare Part D eligible employees (whether or not retired) or to Medicare Part D Medicare-eligible spouses or dependents, the employer must provide those individuals with a Notice of Creditable or Non-Creditable Coverage to advise them whether the drug plan’s total gross value is at least as valuable as the standard Part D coverage (i.e., creditable). Read more from your Fraser Trebilcock attorney.

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  1. Michigan Cannabis Sales Exceed $274 Million in September

Cannabis sales surpassed $274 million in September, via the monthly report from the Michigan Cannabis Regulatory Agency. Michigan adult-use sales came in at $269,813,092.72, while medical sales came in at $4,915,502.78, totaling $274,728,595.50.

Why it Matters: Marijuana sales remain strong in Michigan, particularly for recreational use. However, there still are significant concerns about profitability and market oversaturation that the industry is contending with.

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  1. U.S. Supreme Court Clarifies Legal Standard for Threatening Speech in Counterman V. Colorado

The U.S. Supreme Court’s recent ruling in Counterman v. Colorado addressed the longstanding ambiguity surrounding the standards for criminal prosecution based on perceived threats of violence.

Why it Matters: The Court held that such a prosecution requires proof that the defendant subjectively understood the threatening nature of the statement such that making the statement was at least reckless. This case not only delves deep into First Amendment protections but also has broad implications for online communications and interactions. Read more from your Fraser Trebilcock attorney.

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  1. Business Education Series – Maximizing Productivity: Strategies for More Effective Workdays

Productivity is a habit and it’s something you can become better at every day by choosing the methods and tricks that work for you.

Why it Matters: In the October Business Education Series program, Emmie Musser, Future of Work Strategist with TechSmith, is going to discuss some tried-and-true strategies for more productive and effective workdays. Learn more.

Related Practice Groups and Professionals

Cannabis Law | Sean Gallagher
Employee Benefits | Bob Burgee
Employee Benefits | Sharon Goldzweig
Criminal Law | Paula Spicer

Client Alert: October 14 Deadline: Medicare Part D Notice of Creditable (or Non-Creditable) Coverage

Medicare Part D notices (of either creditable or non-creditable coverage) are due for distribution prior to October 15th. 

The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 requires entities who offer prescription drug coverage to notify Medicare Part D eligible individuals whether their prescription coverage is creditable coverage. With respect to group health plans including prescription coverage offered by an employer to any Medicare Part D eligible employees (whether or not retired) or to Medicare Part D Medicare-eligible spouses or dependents, the employer must provide those individuals with a Notice of Creditable or Non-Creditable Coverage to advise them whether the drug plan’s total gross value is at least as valuable as the standard Part D coverage (i.e., creditable). Medicare Part D notices must be provided to Medicare-eligible individuals prior to October 15th of each year (i.e., by October 14th).

The initial notices were due by November 15, 2005, and have been modified numerous times. The newest model notices and guidance were issued for use after April 1, 2011. Therefore, any notices you send from this point forward must conform to the new guidelines. Use of the former model notices will not suffice.

Downloads to the updated guidance and various notices can be found on the CMS website HERE and HERE.

As a reminder, there are five instances in which such notice must be provided:

  1. Prior to an individual’s initial enrollment period for Part D;
  2. Prior to the effective date of enrollment in your company’s prescription drug coverage;
  3. Upon any change in your plan’s creditable status;
  4. Prior to the annual election period for Part D (which begins each October 15); and
  5. Upon the individual’s request.

Providing the notice above is important as a late enrollment penalty will be assessed to those persons who go 63 days or longer without creditable coverage (for example, if they enroll in an employer’s prescription plan which is not as valuable as the Part D coverage instead of enrolling directly in the Medicare Part D coverage).

If your plan does not offer creditable prescription drug coverage and if the Part D eligible person enrolls in your plan instead of the Part D plan for at least 63 days, a permanent late enrollment penalty of 1% of the premium is added to the Medicare premium for each month the person does not enroll in Part D.

Please contact us if you need assistance with your Notice of Creditable (or Non-Creditable) Coverage.

Reminder: Submit Medicare Part D Notice to CMS

As discussed above, employers offering group health plans with prescription drug coverage are required to disclose to all Part D-eligible individuals who are enrolled in or were seeking to enroll in the group health plan coverage whether such coverage was “actuarially equivalent,” i.e., creditable. (Coverage is creditable if its actuarial value equals or exceeds the actuarial value of standard prescription drug coverage under Part D.) This notice is required to be provided to all Part D eligible persons, including active employees over age 65.

The regulations also require group health plan sponsors with Part D eligible individuals to submit a similar notice to the Centers for Medicare and Medicaid Services (“CMS”). Specifically, employers must electronically file these notices each year through the form supplied on the CMS website.

The filing deadline is 60 days following the first day of the plan year.

At a minimum, the Disclosure to CMS Form must be provided to CMS annually and upon the occurrence of certain other events including:

  1. Within 60 days after the beginning date of the plan year for which disclosure is provided;
  2. Within 30 days after termination of the prescription drug plan; and
  3. Within 30 days after any change in creditable status of the prescription drug plan.

The Disclosure to CMS Form must be completed online at the CMS Creditable Coverage Disclosure to CMS Form web page HERE.

The online process is composed of the following three step process:

  1. Enter the Disclosure Information;
  2. Verify and Submit Disclosure Information; and
  3. Receive Submission Confirmation.

The Disclosure to CMS Form requires employers to provide detailed information to CMS including but not limited to, the name of the entity offering coverage, whether the entity has any subsidiaries, the number of benefit options offered, the creditable coverage status of the options offered, the period covered by the Disclosure to CMS Form, the number of Part D eligible individuals, the date of the notice of creditable coverage, and any change in creditable coverage status.

For more information about this disclosure requirement (instructions for submitting the notice), please see the CMS website for updated guidance HERE.

As with the Part D Notices to Part D Medicare-eligible individuals, while nothing in the regulations prevents a third-party from submitting the notices (such as a TPA or insurer), the ultimate responsibility falls on the plan sponsor.

This alert serves as a general summary and does not constitute legal guidance. Please contact us with any specific questions.


Robert D. Burgee is an attorney at Fraser Trebilcock with over a decade of experience counseling clients with a focus on corporate structures and compliance, licensing, contracts, regulatory compliance, mergers and acquisitions, and a host of other matters related to the operation of small and medium-sized businesses and non-profits. You can reach him at 517.377.0848 or at bburgee@fraserlawfirm.com.


Attorney Sharon GoldzweigSharon Goldzweig is Of Counsel at Fraser Trebilcock, specializing in matters pertaining to employee health and welfare benefits. In a field where the laws are constantly changing, Sharon is constantly looking out for anything that might involve her clients including changes to ERISA and other federal laws. She can be reached at sgoldzweig@fraserlawfirm.com, or at 718.808.5140.

Five Stories That Matter in Michigan This Week – July 28, 2023

  1. Detroit City Council Approves Amendment that Gives Cannabis Businesses More Options on Where to Locate

The zoning amendment shrinks the distance various cannabis businesses must be located from “controlled uses” (such as liquor stores) from 1,000 feet to 750 feet. It also allows cannabis businesses to be located 500 feet from each other—previously they were required to be 1,000 feet apart. It’s still uncertain when the amendment will take effect.

Why it Matters: The amendment passed in advance of Detroit accepting a new round of applications for cannabis dispensaries, micro businesses, and consumption lounges.

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  1. Business Education Series – Setting Meaningful Goals and Time Blocking for Success

On August 22, 2023, gain valuable knowledge and skills to set meaningful goals, establish priorities, and effectively manage their time through the practice of time blocking.

Why it Matters: Participants will learn practical strategies and techniques to enhance their goal-setting abilities, develop a clear sense of direction, and optimize their productivity. Learn more.

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  1. CRA Publishes June 2023 Data, Average Price Decreases Slightly

Per data from the Cannabis Regulatory Agency, the average retail price for adult-use sale of an ounce of cannabis is $89.27, a small decrease from $90.64 in May. This is still a large decrease from the average price in June 2022, when it was $122.43.

Why it Matters: While the prices of cannabis and cannabis-related products continue to decrease and make consumers happy, growers on the other hand are seeing profits decrease resulting in them seeking ways to halt new licenses to be granted in an effort to steady prices. Contact our cannabis law attorneys if you have any questions.

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  1. Avoiding a Strike, UPS and Teamsters Settle Labor Negotiations

Earlier this week, UPS and the International Brotherhood of Teamsters (Teamsters) reached a tentative collective bargaining agreement, avoiding a possible strike when the current contract would have expired August 1, 2023.

Why it Matters: It was estimated that the potential UPS strike could have cost the US economy  more than $7 billion, with $4 billion in losses for consumers and small businesses.

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  1. Client Alert: PCORI Fees Due by July 31, 2023!

In Notice 2022-59 the Internal Revenue Service set forth the PCORI amount imposed on insured and self-funded health plans for policy and plan years that end on or after October 1, 2022, and before October 1, 2023.

Why it Matters: Notice 2022-59 sets the adjusted applicable dollar amount used to calculate the fee at $3.00. Specifically, this fee is imposed per average number of covered lives for plan years that end on or after October 1, 2022, and before October 1, 2023. For self-funded plans, the average number of covered lives is calculated by one of three methods: (1) the actual count method; (2) the snapshot method; or (3) the Form 5500 method. Learn more from your Fraser Trebilcock attorney.

Related Practice Groups and Professionals

Cannabis Law | Sean Gallagher
Labor, Employment & Civil Rights | Dave Houston
Employee Benefits | Bob Burgee
Employee Benefits | Sharon Goldzweig

Five Stories That Matter in Michigan This Week – July 21, 2023

  1. The Pregnant Workers Fairness Act Took Effect June 27, 2023

A new federal employment law, the Pregnant Workers Fairness Act (PWFA), took effect on June 27, 2023. Pursuant to the PWFA, employers with 15 or more employees are required to provide “reasonable accommodations” to nursing and pregnant employees unless it would cause “undue hardship.”

Why it Matters: Failure to abide by the PWFA can expose employers to liability, including back pay, reinstatement, and reasonable attorney’s fees for an affected employee.

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  1. Cannabis to be Removed from State of Michigan Pre-employment Drug Tests Starting This Fall

Beginning October 1, 2023, cannabis will be removed from pre-employment drug tests for most state jobs following a recent vote from the Michigan Civil Service Commission.

Why it Matters: Jobs that require a commercial driver’s license, operate heavy machinery, law enforcement, and healthcare workers are among the sectors not included in this change and still prohibit cannabis use. Learn more.

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  1. CRA Publishes June 2023 Data, Average Price Decreases Slightly

Per data from the Cannabis Regulatory Agency, the average retail price for adult-use sale of an ounce of cannabis is $89.27, a small decrease from $90.64 in May. This is still a large decrease from the average price in June 2022, when it was $122.43.

Why it Matters: While the prices of cannabis and cannabis-related products continue to decrease and make consumers happy, growers on the other hand are seeing profits decrease resulting in them seeking ways to halt new licenses to be granted in an effort to steady prices. Contact our cannabis law attorneys if you have any questions.

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  1. Client Alert: PCORI Fees Due by July 31, 2023!

In Notice 2022-59 the Internal Revenue Service set forth the PCORI amount imposed on insured and self-funded health plans for policy and plan years that end on or after October 1, 2022, and before October 1, 2023.

Why it Matters: Notice 2022-59 sets the adjusted applicable dollar amount used to calculate the fee at $3.00. Specifically, this fee is imposed per average number of covered lives for plan years that end on or after October 1, 2022, and before October 1, 2023. For self-funded plans, the average number of covered lives is calculated by one of three methods: (1) the actual count method; (2) the snapshot method; or (3) the Form 5500 method. Learn more from your Fraser Trebilcock attorney.

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  1. Supreme Court Strikes Down Affirmative Action in Higher Education

On June 29, 2023, in a 6–3 decision, the U.S. Supreme Court ruled that Harvard’s, and the University of North Carolina’s admissions programs violate the Equal Protection Clause of the Fourteenth Amendment of the U.S. Constitution, as well as Title VI of the federal Civil Rights Act.

Why it Matters: The Supreme Court held that both universities’ admissions programs violated equal protection. While the Court had permitted race-based college admissions as an exception to the Equal Protection Clause in the past, it did so on the basis that such programs satisfy the “strict scrutiny” standard, could not utilize race as a stereotype, and had to be finite. Learn more from your Fraser Trebilcock attorney.

Related Practice Groups and Professionals

Labor, Employment & Civil Rights | Dave Houston
Cannabis Law | Sean Gallagher
Employee Benefits | Bob Burgee
Employee Benefits | Sharon Goldzweig
Higher Education | Ryan Kauffman