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Compliance FYI: Creditable Coverage Reminder – Notices Due October 15

Employee Benefits, Medicare

The Centers for Medicare & Medicaid Services (CMS) requires employers to notify individuals eligible for Medicare Part D of whether or not the employer’s prescription drug coverage is creditable. CMS defines “creditable coverage” as coverage which at minimum has the equivalent actuarial value of the Medicare Part D alternative.

The purpose of the creditable coverage notice requirement is to permit Part D eligible individuals to make an informed decision about whether they want to enroll in the Part D prescription drug benefit. The notice must be given at the following times:

  • Annually prior to October 15th each year;
  • Prior to an individual’s Initial Enrollment Period (IEP) for Part D, which is the period during which an individual is first eligible to enroll in Part D (which runs concurrently with an individual’s Medicare Part A & B eligibility period);
  • Prior to the effective date of coverage for any Medicare eligible individual that joins the entity’s plan;
  • Whenever the entity no longer offers prescription drug coverage or changes the coverage offered so that it is no longer creditable or becomes creditable; and
  • Upon request by the Part D eligible member.

We do recommend that employers send the notice to all participants in the plan, because it is difficult for an employer to know who may or may not be on Medicare or who will become eligible within the next 12 months. Remember, this notice is not only for employees, but also dependents, and Medicare is not just for those over 65. Click here for more information and the model notices.

In addition to providing notification to employees regarding whether the prescription drug coverage is “creditable” or “non-creditable”, employers must also disclose the same information to CMS. This disclosure must be submitted to CMS on an annual basis and whenever changes are made to the prescription drug coverage that would affect whether the coverage is creditable. This disclosure must be provided within 60 days after the beginning of the plan year.

For more information and to access the disclosure form, please visit:

The information in this Compliance FYI is a summary of laws and regulations relating to employee benefit plan compliance. This information should not be construed as legal advice. In all cases, employers should consult with their own legal counsel.

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