Creditable Coverage Reminder: Notices Due October 15

Compliance, 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.


Notices do not need to be sent as a separate mailing and can be included with other plan participant information (enrollment/open enrollment materials). Plan sponsors may provide the disclosure electronically if the DOL electronic delivery requirements are met. These requirements allow the plan sponsor to provide the notice to plan participants that have the ability to access electronic documents at their regular place of work if they have access to the plan sponsor’s electronic information system on a daily basis as part of their work duties. If a plan sponsor provides the notice electronically, the plan participant must be informed that the participant is responsible for providing a copy to their Medicare eligible dependents covered under the group health plan.

If the disclosure(s) is included with other plan participant information, the disclosure must be prominent and conspicuous. This means that the disclosure notice portion of the document or a reference to the section in the document being provided to the individual that contains the required statement must be prominently referenced in at least 14-point font in a separate box, bolded, or offset on the first page of the provided plan participant information.

Example Language:

If you (and/or your dependents) have Medicare or will become eligible for Medicare in the next 12 months, a Federal law gives you more choices about your prescription drug coverage. Please see page xx for more details.

For more information and to access the disclosure form, please visit the Centers for Medicare & Medicaid Services.

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