Each year, group health plan sponsors must inform Medicare Part D-eligible individuals and the Centers for Medicare and Medicaid Services (CMS) whether their prescription drug coverage is creditable. The annual notice must be provided before October 15, 2025. CMS has provided model disclosure notices for employers to use.
Medicare-eligible individuals without creditable coverage who do not enroll in Part D on time may pay higher premiums later. While there is no direct penalty for missing the notice, failing to provide it may harm employees.
Action Steps
Employers should verify if their prescription drug coverage is creditable and send Medicare Part D disclosure notices before October 15, 2025. These are often included in open enrollment packets.
Creditable Coverage
Prescription drug coverage is considered “creditable” when its value meets or exceeds standard Medicare Part D benefits, meaning the health plan is at least as generous as Medicare’s own coverage. If the plan offers options like PPO, HDHP, or HMO, each one must meet this standard independently to be considered creditable.
Model Notices
There are two model notices that employers can use:
- A Model Creditable Coverage Disclosure Notice for when the health’s plan description drug coverage is creditable; and
- A Model Non-creditable Coverage Disclosure Notice for when the health’s plan description drug coverage is non-credible
Spanish model notices are also available on the CMS’ website.
Notice Recipients
The creditable coverage notice must be given to all Medicare Part D-eligible individuals covered by or applying for the plan. This includes employees, COBRA participants, retirees, and their covered dependents. Many sponsors provide the notice to all plan participants.
Timing of Notices
Provide creditable coverage notices annually before October 15, before a participant’s initial Part D enrollment, before coverage starts for Medicare-eligible individuals, when coverage changes, or upon request. Including the notice in enrollment materials for new hires is recommended.
Method of Delivering Notice
Creditable coverage notices can be provided separately or with other plan materials, including electronically in some cases. If a Medicare-eligible spouse or dependent lives at a different address, a separate notice must be sent to their residence.
Electronic Delivery
Creditable coverage notices can be sent electronically if participants have regular workplace access. Recipients must be notified of the document’s significance and given access to a paper copy upon request. Sponsors must also inform participants to share notices with Medicare-eligible dependents, and post non-personalized notices online. Consent and a valid email are needed for retirees receiving electronic notices.
Disclosure to CMS
Plan sponsors must report to CMS annually, or when coverage changes. Disclosures are due within 60 days of the plan year start, within 30 days after plan termination, or if creditable status changes. The CMS online disclosure form is found on the CMS Creditable Coverage Disclosure webpage.
Download the bulletin for more details.
