Medicare Part D Creditable Coverage Notice Reminder
Posted on September 16, 2024
Due before October 15, 2024
A Medicare Part D plan provides prescription drug coverage under Medicare. The Medicare Part D notice, required by the Medicare Modernization Act (MMA) at least once a year provides information to individuals enrolled in Medicare about whether employer-provided prescription drug coverage is creditable and the consequences of failing to enroll in a Medicare Part D plan in a timely manner. Creditable coverage is coverage that is expected to pay on average as much as the standard Medicare prescription drug coverage.
Who Must Comply?
- All sponsors of group health plans that offer prescription drug coverage.
When must an employer notify their members of the plan’s creditable coverage status:
- Prior to an individual’s initial enrollment period;
- Prior to the effective date of coverage for any Medicare-eligible individual that joins your plan;
- Whenever prescription drug coverage ends or changes so that it is no longer creditable or becomes creditable;
- Prior to the Medicare Part D Annual Coordinated Election Period beginning on October 15 of each year; or
- Upon the request of a beneficiary.
Who Must Receive?
- all Medicare eligible employees or dependents who are enrolled in your group health plan or who have applied for your group health plan
- all eligible dependents whose last known address is different than that of the employee
Method of Delivery:
Notice can be delivered electronically:
- to employees that have the ability to access electronic documents where they are reasonably expected to perform duties and need access to the company’s electronic information system as an integral part of their job;
- and to individuals who consent to receiving the information electronically
Otherwise, notice must be provided in hard copy.
Click Here for Model Notices from CMS.
*Please see our guidance below for upcoming notices pertaining to 2025 Plans*
Do Changes to Medicare Part D effective in 2025 as a result of the Inflation Reduction Act Affect Creditable vs. Non-Creditable Coverage Status for a Group Health Plan?
The standard Medicare Part D prescription drug coverage will be increasing for 2025 as a result of the Inflation Reduction Act.
- The plan design guidelines of the Simplified Determination were created with consideration of the standard Medicare Part D benefit that was in effect in 2009.
- Because the standard Medicare Part D benefit is increasing, there was some question about whether the Simplified Determination could be used for the 2025 determination.
- Guidance from CMS confirms that the Simplified Determination can be used for 2025, but it may not be available for future years.
Oxford/UHC has already determined that all their Small Group Plans will be creditable for 2025. This may not be the case for other carriers. Oxford/UHC is the only carrier to provide us with confirmation at this time.
For other carriers our legal team has advised based on the above that if a health plan used the CMS Simplified Determination method to determine creditability for 2024, and if the plan design is not changing for 2025 (or is changing but will stay within the Simplified Determination criteria), the plan will continue to be creditable for 2025. If more substantial changes are made to a group health plan drug card we recommend the group consult with their legal council or actuarial firm to determine creditability
