CREDITABLE/NON-CREDITABLE COVERAGE (MEDICARE PART D) ONLINE DISCLOSURE DUE MARCH 1ST
This Alert applies to plan sponsors of calendar year plans
FEBRUARY 19, 2025
Overview
Employers offering prescription drug coverage to individuals eligible for Medicare through a group health plan must fulfill annual disclosure obligations for Medicare Part D. Specifically, employer plan sponsors have until March 1st to submit an annual disclosure to the Centers for Medicare & Medicaid Services (“CMS”), to the extent their plans are maintained on a calendar year basis.
Failure to perform the CMS disclosure obligation on a timely basis could lead to compliance issues. These issues include ineligibility or loss of Medicare retiree drug subsidy, claims of breach of ERISA fiduciary responsibility, or late enrollment penalties assessed to Medicare-eligible employees. Therefore, employers should ensure that they complete these requirements on time.
Action Items
- Review Plan Credibility: Employers must evaluate whether the prescription drug plan offered to employees is creditable or non-creditable, using simplified or actuarial requirements or the adjusted simplified method for integrated group health plans. They must also provide annual notices to Medicare-eligible employees (no later than by October 14th of each plan year, respecting calendar year plans).
- Consult with Insurance Carriers or TPAs: Contact providers to confirm the plan’s prescription drug credibility status prior to the start of the relevant plan year.
- Complete CMS Online Disclosure Form: Submit the required CMS disclosure form within sixty (60) days following the end of the plan year (on or before March 1, 2025, respecting plans maintained on a calendar year basis).
- Monitor Upcoming Changes: Prepare for proposed CMS updates to the simplified determination methodology for FY 2026, which may impact creditability evaluations.
Summary
Employer plan sponsors of group health plans must ensure compliance with Medicare Part D disclosure requirements. This component of the annual disclosure process includes reporting coverage status directly to CMS through the CMS online portal by March 1st for calendar-year plans (non-calendar year plans must submit within 60 days of their plan year start date).
For guidance, the BRCC provides (see attached) step-by-step instructions with screenshots to assist employers in submitting their disclosures: Notification to CMS – Instructions with Screenshots (the process is the same regardless of creditability status).
Additionally, employer plan sponsors should be prepared with the following details:
- Entity Name
- Federal ID Number (EIN)
- Street Address, City, State, & Zip Code
- Phone Number
- Coverage Type
- Number of Prescription Drug Options Offered
- Plan Year, State, and End Date
- Number of Medicare Part-D Eligible Individuals
- Date Annual Notice was provided to Medicare Part-D Eligible Individuals
In case of a change in a plan’s prescription drug coverage status, or if the coverage terminates, a new disclosure must be submitted to CMS within 30 days of the change.
Looking ahead, CMS has proposed updates to the simplified determination methodology for FY 2026, which are not yet final. However, these proposed changes may require employers to reassess their prescription drug plan structures to maintain creditable coverage status, especially plan sponsors of high-deductible plans (“HDHPs”). The BRCC is actively monitoring developments related to publication of revised final rules in this arena. We will keep our colleagues and clients informed of any changes as they arise to ensure practical refinement of compliance strategies.
Additional Information & Related Resources
- CMS Creditable Coverage Disclosure Form
- CMS Creditable Coverage Guidance
- Attachment: Notification to CMS – Instructions with Screenshots
For questions regarding this Client Alert or any other related compliance issues, please contact your Baldwin service team.
Thank you for your time.
Kindest regards,
For more information
We’re ready when you are. Get in touch and a friendly, knowledgeable Baldwin advisor is prepared to discuss your business or individual needs, ask a few questions to get the full picture, and make a plan to follow up.
This document is intended for general information purposes only and should not be construed as advice or opinions on any specific facts or circumstances. The content of this document is made available on an “as is” basis, without warranty of any kind. The Baldwin Insurance Group Holdings, LLC (“The Baldwin Group”), its affiliates, and subsidiaries do not guarantee that this information is, or can be relied on for, compliance with any law or regulation, assurance against preventable losses, or freedom from legal liability. This publication is not intended to be legal, underwriting, or any other type of professional advice. The Baldwin Group does not guarantee any particular outcome and makes no commitment to update any information herein or remove any items that are no longer accurate or complete. Furthermore, The Baldwin Group does not assume any liability to any person or organization for loss or damage caused by or resulting from any reliance placed on that content. Persons requiring advice should always consult an independent adviser.
The Baldwin Group offers insurance services through one or more of its insurance licensed entities. Each of the entities may be known by one or more of the logos displayed; all insurance commerce is only conducted through The Baldwin Group insurance licensed entities. This material is not an offer to sell insurance.
