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Medicare Part D Creditable Coverage Notice

Notifies Medicare-eligible participants that the plan's prescription drug coverage IS creditable. Provide by October 14 to all Medicare-eligible participants and dependents.

Companies Eligible

Any plan that provides prescription drug coverage to a Part D-eligible person — any size, insured or self-funded, including ICHRAs that reimburse premiums.

Part D-eligible people include active employees, dependents, COBRA participants and retirees on Medicare. Use this version for each plan the carrier or actuary determined to be creditable: expected to pay, on average, at least as much as standard Medicare Part D. Non-creditable plans use the companion notice.

What it is

The CMS model notice tells Medicare-eligible participants that the plan's drug coverage is creditable, so they can stay on it and join Part D later without a late-enrollment penalty. Most sponsors send it to all participants rather than identify who is Medicare-eligible.

What needs to be done

  • When: Before October 15 every year (send by October 14); before an individual's initial Part D enrollment period; whenever creditable status changes; and on request.
  • To whom: All participants is simplest; at minimum every Part D-eligible individual, including COBRA participants and retirees.
  • Who performs: Employer distributes; AAB prepares the letters. Insured plans: the carrier issues the creditable determination every year — get it in writing. Self-funded plans: use the CMS simplified determination (60% or 72% test in calendar 2026; 72% is expected to be the only simplified test from 2027) or an actuary.
  • Customize: Entity name, plan name(s), the two plan-provision sentences (whether joining Part D affects this coverage; whether coverage can be regained after dropping it), the contact name and office, address, phone, and the date. If a client has both creditable and non-creditable plans, send both letters, each listing its plans.
  • Deliver: Paper to the home is the default, and one notice per address covers every Part D-eligible person there. If it goes in a packet with other materials it must be prominent: on the first page, or referenced in 14-point type on the first page. Electronic delivery only for participants with regular work-related computer access, and they must be told they can request a paper copy.
  • Keep: Dated copy, recipient list, and the carrier's determination or the simplified-test worksheet.

The separate online disclosure to CMS is due within 60 days after the plan year starts, and within 30 days after Rx coverage ends or creditable status changes. See the Part D CMS Disclosure article.

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