Creditable Coverage Disclosure Requirements for Employers with Medicare-Eligible Enrollees

Employer groups that offer prescription drug coverage to Medicare eligible employees, dependents and/or retirees, need to provide annual creditable disclosures to both their eligible plan participants and the federal Centers for Medicare and Medicaid Services (CMS).

Creditable” plans mean that the coverage provided is as good as, if not better than, the standard Medicare Part D prescription drug coverage. Coverage is considered creditable if it meets all 4 of the following standards:

  1. Provides coverage for brand and generic prescriptions
  2. Provides reasonable access to retail pharmacies/providers
  3. Pays on average at least 60% of participants’ prescription drug expenses; and,
  4. Satisfies at least one of the following:
    • The prescription drug coverage has no annual maximum benefit payable by the plan
    • The prescription drug coverage has an actuarial expectation that the amount payable by the plan will be at least $2000 per eligible individual
    • For entities with integrated health and prescription drug coverage, the plan has no more than a $250 deductible per year and has no annual benefit maximum payable by the plan

Once Creditable status is determined, the employer has 2 responsibilities:

  1. Provide the Medicare Part D Creditable Coverage Notice to all Medicare beneficiaries by October 14th each year, upon any Medicare eligible individual’s enrollment in the plan, and at any time it is requested by any eligible beneficiary.
  2. Complete the CMS disclosure regarding creditable status by  March 1st of each year by completing the online form. Note: if the plan sponsor offers multiple prescription drug plan options, they must test each benefit option to attest if the plan is or is not creditable.

Since enrollment changes throughout the year, and Medicare eligibility is not always known, all employer groups who offer prescription drug coverage are advised to be proactive with the above by incorporating these notices into their benefits administration practices.

Please contact us if you require assistance in determining creditability status and/or meeting the above requirements. For more information see here: