If you sponsor a group health plan, there’s an important annual responsibility you can’t overlook: Medicare Part D Creditable Coverage Notices. While the name might sound a little intimidating, these notices are simply a way to let employees (and their dependents) know how your prescription drug coverage stacks up against Medicare’s.
Why does this matter? Because these notices help employees make smart choices about their healthcare and avoid potential penalties down the road. Let’s break it down.
What Is a Creditable Coverage Notice?
A Creditable Coverage Notice tells employees whether your prescription drug plan is considered “creditable”, meaning it’s expected to pay, on average, at least as much as Medicare’s standard Part D coverage.
In other words, the notice answers a key question for Medicare-eligible employees: Can I safely delay enrolling in Part D without getting hit with a penalty later?
When Do You Need to Send the Notice?
Timing is everything with these notices. Employers are required to distribute them:
- Every year by October 15 (before Medicare’s Annual Enrollment Period begins).
- When someone first becomes eligible for Medicare.
- When an employee first joins your health plan.
- Whenever your drug coverage changes (from creditable to non-creditable, or vice versa).
- Upon request by an employee.
So yes, October 15 is the big annual deadline, but there are other important times when you’ll need to send it out too.
Employer Responsibilities
Here’s what’s on your plate as the employer:
- Determine if your plan’s prescription drug coverage is creditable or non-creditable.
- Provide the notice to all Medicare-eligible individuals in your plan—this includes employees, retirees, COBRA participants, and dependents.
- File an online disclosure notice with CMS within 60 days of the start of your plan year, or within 30 days of a coverage change.
What Happens If You Don’t Provide It?
There’s no direct fine from CMS for missing the notice. But here’s the catch: employees who don’t know whether their coverage is creditable may delay enrolling in Medicare Part D, only to later discover that they owe permanent late enrollment penalties. That creates confusion, frustration, and unhappy employees, something every employer wants to avoid.
Employee Responsibilities
On the flip side, employees and their dependents who are Medicare-eligible should:
- Review the notice carefully each year.
- Use it to decide whether to stick with your plan, enroll in Medicare Part D, or both.
- Keep a copy of the notice in case Medicare ever asks for proof of prior creditable coverage.
Need Help Navigating This?
We know Medicare notices aren’t exactly the most exciting part of running a benefits program. But they’re important, and getting them right helps your employees make confident, informed decisions about their healthcare.
That’s where Silberman Group comes in. We help employers take the guesswork out of compliance, from determining whether your coverage is creditable to making sure notices go out on time.
Have questions about Medicare Creditable Coverage Notices or need help getting everything in order? Contact Silberman Group today—we’re here to make the process easier.
