Employers that offer prescription drug coverage must provide a notice to all Medicare-eligible employees, dependents, and retirees each year, informing them whether their coverage is considered “creditable” or “non-creditable.”
What does this mean?
- Creditable coverage: Your prescription drug plan is considered creditable if it is expected to pay, on average, as much as the standard Medicare prescription drug coverage.
- Non-creditable coverage: Your prescription drug plan is considered non-creditable if it does not provide, on average, as much coverage as Medicare’s standard plan. Individuals with non-creditable coverage may face penalties if they delay enrolling in Medicare Part D.
Deadline
You are required to distribute these notices by October 15th each year, which is just before the annual Medicare Part D Open Enrollment period begins.
Where to find model notices
The Centers for Medicare & Medicaid Services (CMS) provides model notice templates (both creditable and non-creditable) to help employers meet these requirements. You can access the templates and more information here:
Next steps
- Review your current prescription drug coverage to determine whether it is creditable or non-creditable.
- Use the CMS templates to issue the correct notice to all Medicare-eligible individuals by October 15th.
- Retain copies of the notice and documentation regarding how and when it was distributed.
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