Employers must inform the Centers for Medicare and Medicaid Services (“CMS”) and participants and beneficiaries who qualify for Medicare Part D of the creditable or non-creditable status of the group health plan prescription drug plan(s).
When prescription medication coverage meets or exceeds Medicare Part D, it is considered creditable. Any coverage that falls short of Medicare Part D’s quality standards is deemed non-creditable
As previously reported, the Inflation Reduction Act of 2022 (“IRA”) changed aspects of the Medicare Part D program to enhance and improve Medicare Part D coverage. The changes include:
- A newly defined standard Part D benefit design consisting of three phases: annual deductible, initial coverage, and catastrophic coverage;
- A lower annual out-of-pocket (“OOP”) threshold of $2,000;
- The sunset of the Coverage Gap Discount Program (“CGDP”) and establishment of the Manufacturer Discount Program (“Discount Program”); and
- Changes to the liability of enrollees, Part D sponsors, manufacturers, and CMS in the newly defined standard Part D benefit design.
As a result of these changes, some employer sponsored prescription drug coverage may no longer qualify as creditable for the 2025 plan year.
Open enrollment materials: The Part D disclosure must be clear and conspicuous if the employer choose to combine it with other information about plan participants. This means that on the first page of the information provided, the disclosure section of the document (or a reference to the section in the document being given to the person that contains the required statement) must be clearly referenced in at least 14-point font in a separate box, bolded, or offset. In accordance with the regulations, CMS offers sample notice letters that can be used to reveal whether the plan’s coverage is creditable or not. These letters are available at: Model Notice Letters | CMS
Have Questions? and want to read more about the changes? Check Emerson Rodgers for more details.
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