Each year, Medicare Part D requires group health plan sponsors to disclose to individuals who are eligible for Medicare Part D and to the Centers for Medicare and Medicaid Services (CMS) whether the health plan’s prescription drug coverage is creditable. Plan sponsors must provide the annual disclosure notice to Medicare eligible individuals before October 15, which is the start date of the annual enrollment period for Medicare Part D.
The notice lets employees know whether their employer’s plan has prescription drug coverage that is at least as good (creditable) or is not as good (non-creditable), as the prescription drug coverage under a Medicare Part D plan. This allows an employee who is eligible to enroll in Medicare Part D the ability to make an informed decision about whether to enroll in Part D or stay on the employer’s plan.
The notice is only required to be provided to individuals eligible for Medicare Part D (typically, those age 65 and over). However, an employer may send the notice to all participants, particularly, when they are unsure who is eligible for Part D, such as a dependent who may be eligible because of disability.
The Center for Medicare & Medicaid Services (CMS) has provided model disclosure notices for employers to use.
Next Steps for Employers
Employers should confirm whether their health plans’ prescription drug coverage is creditable or non-creditable and prepare to send their Medicare Part D disclosure notices before October 15. To make the process easier, employers often include Medicare Part D notices in open enrollment packets they send out prior to October 15.