HR professionals must prepare to distribute the annual Medicare Part D Creditable Coverage Notice by October 15, 2025. This federally mandated notice helps Medicare-eligible individuals make informed decisions about prescription drug coverage during the Medicare Open Enrollment period.
Understanding the Notice Requirement
The Medicare Part D notice serves a specific purpose: informing employees whether your group health plan's prescription drug coverage meets or exceeds Medicare Part D standards. This determination affects whether Medicare-eligible individuals should enroll in a Medicare Part D plan or maintain their current employer coverage.
Creditable vs. Non-Creditable Coverage:
Who Receives the Notice?
While only Medicare Part D-eligible individuals are legally required to receive the notice, most employers distribute it to all plan participants. This broad distribution approach prevents compliance gaps since employers may not always know which dependents qualify for Medicare due to disability or other circumstances.
The notice must reach:
Distribution Timeline and Methods
Annual Requirement: The notice must be provided once every 12-month period ending October 14th. Employers who distribute the notice earlier in the year (perhaps with open enrollment materials) satisfy the annual requirement and need not send it again before October 15th.
Additional Distribution Triggers:
Electronic Delivery Options: Electronic distribution is permitted under ERISA rules. Employees with work-related computer access can receive electronic notices automatically, while other employees must provide consent for electronic delivery.
Model Notices and Customization
CMS provides standardized model notices available in English and Spanish. Most employers use either the "Creditable Coverage" or "Non-Creditable Coverage" template, though organizations with multiple plan options may need separate notices if coverage varies between plans.
Dual Compliance Obligation
Beyond employee notification, employers must also complete the annual CMS disclosure requirement. This separate "online filing" notifies the government about your plan's creditable coverage status. Both the employee notice and CMS filing are required for full compliance.
Implementation Checklist
Immediate Actions:
Risk Management Perspective
Non-compliance with Medicare Part D notice requirements can result in penalties up to $1,000 per day per participant. Given increased CMS enforcement activity, maintaining careful documentation of notice distribution methods and timing is essential for demonstrating good-faith compliance efforts.
The October 15th deadline coincides with Medicare Open Enrollment, making timely distribution important for employees making coverage decisions. Early preparation ensures compliance while supporting employees' informed healthcare choices during this enrollment period.
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This article is for informational purposes only and is not intended as legal, tax, or benefits advice. Readers should not rely on this information for taking (or not taking) any action relating to employment, compliance, or benefits. Always consult with a qualified professional before making decisions based on this content.