Creditable Coverage Disclosure to CMS and Medicare-Eligible Individuals
The two disclosure duties plan sponsors should track: notices to Medicare-eligible individuals and annual reporting to CMS.
What creditable coverage means
Prescription drug coverage is creditable when it is expected to pay, on average, at least as much as standard Medicare Part D coverage. Individuals need this information because a continuous gap of 63 days or more without Part D or other creditable coverage may lead to a late-enrollment penalty.
Notice to Medicare-eligible individuals
Entities offering prescription drug coverage generally must disclose whether the coverage is creditable or non-creditable to Medicare-eligible active employees, dependents, COBRA participants, retirees, and other covered individuals. The annual notice is due before October 15 and is also required at specified enrollment, status-change, and request events.
Disclosure to CMS
Control checklist
- Determine creditable status for each prescription drug option annually.
- Identify all potentially Medicare-eligible covered individuals.
- Use a compliant notice with all required data elements.
- Retain delivery evidence and the CMS submission confirmation.
- Coordinate changes with carriers, actuaries, brokers, and COBRA administrators.
Primary sources
This resource is provided for general educational purposes and does not constitute legal, tax, benefits, or other professional advice. Requirements vary by organization and jurisdiction. Confirm current rules with authoritative sources and qualified advisors.
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