Is your organization providing prescription drug coverage to Medicare-eligible individuals? If so, there’s an important deadline approaching. By March 1, 2025, employers offering calendar-year health plans must complete their annual Medicare Part D disclosure with the Centers for Medicare & Medicaid Services (CMS).
What You Need to Know
This disclosure isn’t just another paperwork requirement. It’s a critical compliance step that helps ensure proper coordination between employer-sponsored health plans and Medicare Part D coverage. The disclosure requires employers to report whether their prescription drug coverage is “creditable” or “non-creditable” compared to Medicare Part D’s coverage.
Does This Apply to Your Organization?
You’ll need to complete this disclosure if your group health plan provides prescription drug coverage to any Medicare-eligible individuals, including:
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Active employees
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Disabled employees
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COBRA participants
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Retirees
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Covered spouses and dependents
Understanding Creditable Coverage
Your prescription drug coverage is considered creditable if its actuarial value meets or exceeds Medicare Part D’s prescription drug coverage. In simpler terms, this means your plan’s expected paid claims should be at least equal to those under Medicare Part D.
If you have an insured plan, your first step should be consulting with your insurance carrier about this determination. For self-insured plans, you may be able to use a simplified method depending on your plan design. Some situations might require a full actuarial determination.
Important Timing Requirements
While March 1, 2025, is the upcoming deadline for calendar-year plans, there are other situations that trigger disclosure requirements:
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Within 60 days after your plan year begins
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Within 30 days after terminating prescription drug coverage
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Within 30 days after any change in your plan’s creditable coverage status
How to Complete the Disclosure
The process is straightforward—CMS requires all disclosures to be submitted through their online form. Visit the CMS creditable coverage website to access the form and detailed instructions. You’ll need information about your coverage types, number of options, creditable coverage status, and the number of Part D-eligible individuals covered.
Don’t Forget Individual Notices
Beyond the CMS disclosure, you must also notify Medicare-eligible individuals about your coverage status. These notices should be distributed before October 15 each year and at several other key times, such as before initial enrollment periods and whenever coverage changes.
Need Help?
If you’re unsure about your plan’s status or need assistance with the disclosure process, we recommend working with your benefits advisor. The recent Inflation Reduction Act has introduced prescription drug cost changes that might affect your coverage’s creditable status, making professional guidance particularly valuable this year.
Remember: Missing this deadline isn’t just about compliance. It’s about ensuring your Medicare-eligible participants have the information they need to make informed decisions about their prescription drug coverage.
