September 24, 2024
Creditable coverage is defined by the Centers for Medicare & Medicaid Services (CMS) as prescription drug coverage that is at least as good as or better than what Medicare Part D provides.
CMS requires Medicare-eligible individuals to have creditable coverage within 63 days of qualifying for Medicare. If they go more than 63 days without creditable prescription drug coverage, they could face financial penalties imposed by CMS.
While employer groups are not required to provide creditable coverage for Medicare-eligible members, they are required to notify these individuals before Oct. 15 each year about their plans’ creditable coverage status. This enables members to take action to secure creditable coverage if they choose.
The 2022 passage of the Inflation Reduction Act significantly increased Part D benefits—including a $2,000 out-of-pocket-maximum—beginning Jan. 1, 2025. This set the creditable coverage bar higher in 2025 for commercial health plans and will result in more of our plans not meeting creditability requirements.
Here’s how we’re supporting groups whose plans fail the creditability test for 2025 so they can take action if they choose to offer their affected employees creditable plan options.
We’ve updated our 2025 product grids for groups to check their plans’ creditable coverage status. Groups wishing to add a creditable coverage plan for 2025 should contact their account representative.
We’re offering to test Large (51+) and ASO groups’ plans to determine their creditable coverage status. Please work with your account representative to request a plan test. Our analyses for ASO groups are informational only; final determination of creditable coverage status should always be performed by groups’ own actuarial consultant.
In addition, the following resources are available to help groups navigate the change and/or take action on behalf of Medicare-eligible employees:
- For more information about employers’ responsibilities: https://www.cms.gov/medicare/employers-plan-sponsors/creditable-coverage
- To help Medicare-eligible employees understand creditable coverage, please see the Medicare & You 2025 official U.S. government Medicare handbook.
Questions? Please contact your account representative.