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Employers who offer prescription drug plans to members who can get Medicare Part D are required to let these members know if their current prescription drug plan(s) are creditable or non-creditable.  This must be done by October 15 of each year. Creditable Coverage means that the drug coverage is expected to pay, on average, as much as the standard Medicare prescription drug coverage. Non-creditable coverage means that prescription coverage does not meet a minimum standard of benefits set by the federal government.

This is important for employees who will try to enroll in Medicare Part D after they leave an employer’s plan as they will or will not be late entrants for their post retirement prescription coverage. At risk are late entrant penalties and potential inability to enroll in Medicare Part D when requested.

All insurance carriers should provide employers with determination of creditable status. Employers can write their own letters or modify the sample letters provided by Medicare at http://www.cms.hhs.gov/creditablecoverage to suit their needs. All employer letters should include effective dates of coverage.  Employers should keep a sample copy and ask employees to keep their letter in a permanent file.

Please let us know if your firm has any employees who are eligible to enroll in Medicare Part D and your insurance carrier has not provided you the information necessary to prepare the required notification.

If you have questions about this please do not hesitate to call our office for details.