Employers that offer group health plans with prescription drug coverage to Medicare-eligible individuals must comply with Medicare Part D disclosure requirements.
These requirements include notifying Medicare-eligible individuals whether the employer’s prescription drug coverage is creditable, meaning it is expected to pay, on average, at least as much as standard Medicare Part D prescription drug coverage.
Key Deadline: October 15, 2026
Annual Employer Responsibilities
Each year, plan sponsors must provide Medicare Part D creditable or non-creditable coverage notices to Medicare-eligible individuals before the Medicare Part D annual enrollment period begins on October 15.
Plan sponsors also have a separate annual disclosure requirement with the Centers for Medicare & Medicaid Services (CMS).
What Is Creditable Coverage?
Creditable coverage is prescription drug coverage that is expected to pay, on average, at least as much as standard Medicare Part D coverage.
Key Steps for Employers
Employers sponsoring group health plans with prescription drug coverage should:
- Determine whether the prescription drug coverage is creditable or non-creditable.
- Provide the appropriate disclosure notice to Medicare-eligible participants before October 15.
- Complete the required Disclosure to CMS Form by the applicable CMS deadline.
- Review whether additional notices are required during the year because of changes in coverage or an individual’s Medicare eligibility.
CMS provides model notices employers may use for both creditable and non-creditable coverage.
When Must Medicare-Eligible Individuals Be Notified?
The Medicare Part D disclosure notice must generally be provided:
- annually, prior to October 15;
- before an individual’s initial enrollment period for Medicare Part D;
- before the effective date of coverage for a Medicare-eligible individual enrolling in the plan;
- when the plan no longer provides creditable prescription drug coverage; and
- upon request.
Providing the annual notice before October 15 satisfies certain annual notification requirements, but employers should be aware of situations during the year that may trigger an additional notice.
How Can Notices Be Delivered?
Employers may provide the notice as a standalone communication or include it with other plan materials, provided applicable CMS requirements are followed.
Notices may also be delivered electronically when the applicable electronic disclosure requirements are met.
Employers should also consider Medicare-eligible dependents. If a Medicare-eligible dependent resides at a different address from the employee, a separate notice may be necessary.
CMS Reporting Requirement
In addition to notifying Medicare-eligible individuals, employers and other applicable plan sponsors must report the creditable coverage status of their prescription drug plan to CMS using the Online Disclosure to CMS Form.
The CMS filing does not generally share the October 15 participant notice deadline.
The disclosure is generally due:
- no later than 60 days after the beginning of the plan year;
- within 30 days after termination of the prescription drug plan; or
- within 30 days after a change in the plan’s creditable coverage status.
CMS treats these as two separate disclosure obligations.
New for 2027: HRA and ICHRA Disclosure Requirements
Beginning with coverage on or after January 1, 2027, account-based health plans such as Health Reimbursement Arrangements (HRAs), including Individual Coverage HRAs (ICHRAs), are excluded from the Medicare Part D creditable coverage disclosure requirements.
CMS determined that these account-based arrangements do not themselves provide prescription drug coverage and therefore should not be treated in the same manner as plans that directly provide prescription drug benefits.
However, an employer that also sponsors a traditional group health plan with prescription drug coverage must continue to comply with the Medicare Part D disclosure requirements for that plan.
So, for example, an employer offering both a traditional medical plan with prescription drug coverage and an HRA would still need to determine the traditional plan’s creditable coverage status and provide the required disclosures for that coverage.
Why Creditable Coverage Notices Matter
Medicare-eligible individuals need to know whether their current prescription drug coverage is creditable when deciding whether to enroll in Medicare Part D.
In general, an individual who goes 63 consecutive days or more without Medicare Part D or other creditable prescription drug coverage after becoming eligible may be subject to a Medicare Part D late enrollment penalty.
Have Questions?
Please do not hesitate to reach out to the Group Benefits team at Mason-McBride. We’re here to discuss your particular situation further if you have additional questions.
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