Group health plans that offer prescription drug benefits to individuals who are eligible for Medicare Part D must inform those participants as to the creditability of their coverage. For an employer’s prescription drug coverage to be creditable, it must be, on average, at least as good as Medicare Part D coverage. This means the actuarial value of the employer’s coverage must equal or exceed the actuarial value of standard Medicare Part D coverage.
The Center for Medicare and Medicaid Services released the parameters for standard Medicare Part D coverage for 2016. All amounts have increased from 2015 coverage.
- Deductible: $360;
- Initial coverage limit: $3,310;
- Out-of-pocket limit: $4,850;
- Total covered Part D spending at the out-of-pocket limit for beneficiaries who are not eligible for the coverage gap discount program: $7,062.50;
- Estimated total covered Part D spending at the out-of-pocket limit for beneficiaries who are eligible for the coverage gap discount program: $7,515.22; and
- Minimum cost-sharing under the catastrophic coverage portion of the benefit: $2.95 for generic/preferred multi-source drugs, and $7.40 for all other drugs.
Employers will use these values to determine if their plans’ coverage is creditable or non-creditable in 2016.
