Employers offering group health plans with prescription drug coverage must comply with an important annual notification requirement for their Medicare-eligible employees and dependents. By October 15th, 2024, employers are required to inform these individuals whether their current prescription drug coverage is “creditable” or “non-creditable” compared to Medicare Part D coverage.
Creditable Coverage refers to prescription drug plans that are expected to cover, on average, as much as the standard Medicare Part D plan. If an employee or dependent has creditable coverage and later decides to enroll in Medicare Part D, they can avoid a late enrollment penalty.
On the other hand, Non-Creditable Coverage indicates that the employer’s plan does not meet this standard, potentially leading to penalties for individuals who delay enrolling in Medicare Part D.
This notification is crucial for helping employees and dependents make informed decisions regarding their health coverage. The October 15th deadline ensures that individuals have time to assess their options before Medicare’s Annual Enrollment Period, which begins on October 15th and ends on December 7th each year.
As the healthcare landscape evolves, significant changes to Medicare Part D are anticipated for 2025. These changes could impact the comparison between employer-provided coverage and Medicare Part D, making the 2024 notification even more critical.
Employers must accurately determine the status of their coverage and effectively communicate it to their employees and dependents by the October 15th deadline to ensure compliance and support informed decision- making.
For more Employee Benefits resources, contact INSURICA today.
Copyright © 2024 Smarts Publishing. This is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel or an insurance professional for appropriate advice.