Skip to content
Medicare Part D

Medicare Part D Changes May Impact Creditable Coverage Status of Employer Plans

The Baldwin Group
Updated: April 24, 2024
2 minute read

The Inflation Reduction Act of 2022 (IRA) includes several cost-reduction provisions affecting Medicare Part D plans, which may impact the creditable coverage status of employer-sponsored prescription drug coverage beginning in 2025.

Employers that provide prescription drug coverage to individuals who are eligible for Medicare Part D must inform these individuals and the Centers for Medicare & Medicaid Services (CMS) whether their prescription drug coverage is creditable, meaning that the employer’s prescription drug coverage is at least as good as Medicare Part D coverage.

CMS’ Draft Part D Redesign Program Instructions state that given the significant changes that the IRA made to Medicare Part Done of the methods for determining whether employer-sponsored prescription drug coverage is creditable will no longer be valid as of calendar year 2025. These draft program instructions are subject to change, and CMS will issue final program instructions for 2025 after considering the public comments received in response to the draft program instructions.

There is no penalty or fee to the employer to the extent any prescription coverage offered that is non-creditable in nature. Non-creditable prescription drug coverage can still be a valuable benefit for employees. However, individuals need to know whether their prescription drug coverage is creditable or non-creditable. If the coverage is non-creditable and Medicare-eligible individuals fail to enroll in Part D during their initial enrollment period, they may be subject to a higher Part D premium if they enroll in Part D at a later date.

More information and resources related to the IRA’s changes to the Medicare Part D program are available on the CMS Part D Improvements webpage.

Related Insights

Stay in the know

Our experts monitor your industry and global events to provide meaningful insights and help break down what you need to know, potential impacts, and how you should respond.

Baldwin Bulletin
Question of the Month.
Question: Please confirm whether an employee’s spousal relocation of personal residence to the United States following a period of several...
Baldwin Bulletin
U.S. Supreme Court Hears Arguments Related to Legality of Medication Abortion.
On March 26, 2024, the Supreme Court heard the case of Alliance for Hippocratic Medicine, et al v FDA (5th...
Medicare Part D
Important Update on New Medicare Part D Creditable Coverage Determination.
It was previously reported that the Inflation Reduction Act of 2022 (“IRA”) included certain cost-reduction provisions that may affect Medicare...
PCORI 2024 Fee Payment Amount Adjusted and Payment Reminder.
The annual fee to fund the Patient-Centered Outcomes Research Institute (PCORI) Trust Fund Fee ​is due on July 31, 2024,...
Baldwin Bulletin
Impact of the Religious Freedom Restoration Act (RFRA) on the ACA Sec. 1557 & Title VII of the Civil Rights Act (CRA)
US District Court ruling in Christian Employers Alliance v. EEOC, et al. limits federal government enforcement of ACA Sec. 1557...
Let's make it possible

Partner with us to build solutions that align with your business, individual, or employee needs and open new possibilities for your future.

Connect with us