Medicare Part D Notice Distribution Required by October 14, 2024

Employers of all sizes that sponsor prescription drug plans (whether fully insured or self-insured) are required to annually inform Medicare eligible individuals whether the plan’s coverage is “creditable” or “non-creditable.” Medicare Part D eligible individuals include active, disabled, COBRA, and retired individuals (employees or former employees and dependents) eligible to participate in the employer’s plan(s). Coverage is creditable when it pays, on average, at least as much as Medicare’s standard Part D prescription drug coverage.

The Medicare Part D notice of creditable coverage must be distributed by October 14, 2024 (prior to the October 15 start of the Medicare annual enrollment period). CMS provides Model Notice Letters in English and Spanish for this purpose. The notices are intended to help Part D eligible individuals compare the employer’s coverage options with a Part D plan and make informed decisions about whether to enroll in a Medicare Part D plan. Timely receipt of the notice can help these individuals avoid paying higher premiums (also known as late enrollment penalties) for Medicare Part D coverage. These penalties may apply if an individual fails to maintain creditable coverage for a continuous period of 63 or more days after the end of their initial enrollment period.

Enhancements made to Medicare Part D as part of the Inflation Reduction Act have increased the actuarial value of the Part D standard plan (thus raising the creditability bar). Although it is expected that most prescription drug plans will maintain creditable coverage status, employers should work with their carriers, TPAs, and actuaries, as applicable, to determine if their prescription drug coverage is creditable. There is no requirement that an employer offer creditable coverage, but they must determine the creditable status of each of their plans and timely notify Medicare Part D eligible individuals.

For further information on the creditable coverage disclosure requirements and changes to Part D under the Inflation Reduction Act, download Medicare Part D Creditability Determinations and Disclosures: A Guide for Employers.