Employers that offer prescription drug coverage in 2024 must provide notices of “creditable” or “non-creditable” coverage to Medicare-eligible employees or covered dependents before the annual Medicare Part D annual enrollment period begins.
Q: What are my responsibilities as an employer regarding Medicare Part D notices?
A: The Medicare Modernization Act (MMA) requires that plan sponsors that offer prescription drug coverage must provide notices of “creditable” or “non-creditable” coverage to Medicare-eligible individuals before each year’s Medicare Part D annual enrollment period, by October 15th.
Q: What is Creditable Coverage?
A: Prescription drug coverage that is expected to pay on average as much as the standard Medicare prescription drug coverage is considered creditable. More information about creditable coverage can be found at the Center for Medicare & Medicaid Services website, including a Creditable Coverage Simplified Determination method that plan sponsors can use to determine if a plan provides creditable coverage.
Q: Who must receive a Medicare Part D notice?
A: The notice must be provided to the following Medicare-eligible individuals covered by or eligible for the employer’s plan:
- Retirees and their dependents
- Active employees and their dependents
- COBRA participants and their dependents
- COBRA possible electees and their dependents
Q: Why are Medicare Part D notices required?
A: Disclosure of whether employer-sponsored prescription drug coverage is creditable allows individuals to make informed decisions about whether to remain in their current prescription drug plan or enroll in Medicare Part D during the Part D annual enrollment period.
Q: If we provide notices at open enrollment, do we need to send them now?
A: The requirement for Medicare D is to provide a notice of creditable (or non-creditable) coverage (or a Notice of Non-Creditable Coverage) by October 15, each year, to all Medicare-eligible members covered on your company-sponsored prescription plan. You have met your notice obligation if your open enrollment covers these requirements. If your open enrollment timeframes and recipients do not meet the criteria mentioned, a Medicare D notice should be sent at this time.
Q: Are Model Notices Available?
A: Model notices can be used to satisfy creditable/non-creditable coverage disclosure requirements. The CMS has posted on its website:
- A Medicare Part D Notice of Creditable Coverage.
- A Medicare Part D Notice of Non-Creditable Coverage.
Spanish versions are also available.
Q: Are there other times when notices must be provided?
A: CMS also requires that Part D-eligible individuals be given notice of the creditable or non-creditable status of their prescription drug coverage at the following times:
- Before an individual’s initial enrollment period for Part D.
- Before the effective date of coverage for any Medicare-eligible individual who joins an employer plan.
- Whenever prescription drug coverage ends or creditable coverage status changes.
- On the individual’s request.
Q: Is there a separate disclosure that must be made to CMS?
A: Plan sponsors generally must disclose creditable coverage status to CMS within 60 days after the beginning of each plan year. Disclosure is made using the Disclosure to CMS Form on the CMS website.
In addition to the annual disclosure, plan sponsors must submit a new disclosure form to CMS within 30 days following any change in the creditable coverage status of a prescription drug plan. This includes both a change in the coverage offered so that it is no longer creditable (or non-creditable) and the termination of a creditable coverage option. A new disclosure form must also be submitted to CMS within 30 days after the termination of a prescription drug plan.
Kristin Young, JD, PHR, SHRM-CP | Operations and Compliance Manager
