Group Health Plan Creditable/Non-Creditable Coverage Notices Due by 10/14/2023

Employee Benefits

Group Health Plan Creditable/Non-Creditable Coverage Notices Due by 10/14/2023

Sponsors of group health plans that provide prescription drug benefits are responsible for determining and notifying Medicare-eligible beneficiaries of whether the plan provides creditable* or non-creditable drug coverage before October 15 of each year.

When is the Notice of Creditable or NonCreditable Coverage (aka “Part D Notice”) due?

The Notice must be provided at each of the following times:

  1. Before the start of the Medicare Part D annual coordinated enrollment period (ACEP). The 2023 ACEP begins October 15 and runs through December 7 for Medicare prescription drug coverage (Part D) and Medicare Advantage plans (Part C) effective January 1, 2024. Therefore, generally, the notice deadline is October 14, 2023;
  2. Before the individual’s initial Medicare enrollment period;
  3. Prior to the effective date of the individual’s coverage under the employer’s health plan;
  4. Upon request; and
  5. Whenever creditable status for the prescription drug coverage provided by the health plan changes.

Because employers may not know which employees’ family members are Medicare-eligible due to age or disability status, many employers will distribute the Notice to all employees covered by the group health plan.

Note that plan sponsors who distribute the Part D notice at least once per year to all plan participants in advance of the October 14 deadline (i.e., within the 12 consecutive months preceding October 14) generally are considered to have satisfied the notice requirements under one (1) and two (2) above. In other words, if a plan sponsor delivered the Notice to a plan participant anytime within the 12 months preceding October 14, they would not need to redistribute the Notice to that participant before the covered individual’s annual or initial Medicare enrollment period.

For what time period am I providing the Notice?

CMS guidance does not address whether the Notice should reflect the creditable coverage status of the group health plan as (1) the date on which the notice is distributed or (2) some future date (e.g., the following plan year). Given the lack of guidance, plan sponsors should seek advice about this issue from legal counsel.

In any case, if there are subsequent changes in creditable coverage status, a new Notice must be distributed to affected participants and beneficiaries.

To whom must the Notice be provided?

The appropriate Part D Notices must be provided to affected participants and beneficiaries (who are Medicare-eligible due to age or disability) covered by the Group Health Plan, including active employees, retirees and their spouses and dependents who are Medicare-eligible.

How is the creditable or non-creditable status of the prescription drug benefits provided by a Group Health Plan determined?

A simplified (safe harbor) method for determining creditable coverage status may be applied if the plan fits within specific parameters. See Creditable Coverage Simplified Determination. If employers are receiving a Retiree Drug Subsidy, or the plan does not fit within the simplified determination parameters, and the plan sponsor would like to show creditable status, an actuarial determination is required.

*”Creditable coverage” means that the prescription drug coverage provided by the group health plan provides benefits that are at least equal to or better than Medicare Part D.”

Regulatory and Legislative Strategy Group