Employers that offer prescription coverage as part of their benefits packages must give a notice to Medicare-eligible participants letting them know if the prescription drug coverage is “creditable” or “non-creditable.” Prescription drug coverage is creditable if it provides benefits that are at least as good as the standard Medicare Part D benefit.
This notice is referred to as the “Medicare Part D Creditable Coverage Notice” and must be given to Medicare-eligible individuals by October 15.
Individuals have to enroll Medicare when they first become eligible. If they do not enroll at that time, they will be subject to a penalty premium charge when they enroll at a later date. Medicare-eligible individuals with creditable prescription drug coverage will not be subject to a penalty when enrolling in Medicare Part D after initial eligibility.
The Medicare Part D annual enrollment period runs from October 15 through December 7 each year. Employers must distribute their Medicare Part D notices prior to October 15 so covered Medicare-eligible individuals have the information they need to decide if they should enroll in Medicare Part D or not. Notices also must be provided before group health plan enrollment, when group health plan coverage ends, when creditable status changes, or upon request.
Model notices are available on the Centers for Medicare & Medicaid Services’ website. Click here for access to the model notices.