Medicare Part D Non-Creditable Coverage Notice
Notifies Medicare-eligible participants that the plan's prescription drug coverage is NOT creditable and explains late-enrollment penalty risk. Provide by October 14.
Companies Eligible
Any plan that provides prescription drug coverage to a Part D-eligible person, for each plan determined to be non-creditable.
Same population as the creditable notice. Use this version for each plan the carrier or actuary determined is not expected to pay, on average, as much as standard Medicare Part D — typically high-deductible plans with no Rx coverage before the deductible, or limited Rx designs.
What it is
The CMS model notice tells Medicare-eligible participants that the plan's drug coverage is not creditable, that going 63 or more days without creditable coverage means a permanent late-enrollment penalty (at least 1% of the base premium per month without coverage), and that they may want to join a Part D plan. The stakes are higher than the creditable letter, so accuracy of the plan list matters.
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 or an actuary. For calendar 2026 the simplified test is either the existing 60% method or the revised 72% method; for plan years beginning in 2027 CMS has finalized that only the revised method applies, at 73%, so the 60% method is gone.
- Customize: Entity name, plan name(s), the two plan-provision sentences, the contact block and the date. Where a client also has creditable plans, send the creditable letter for those separately.
- 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 determination that supports the non-creditable finding.
The separate online disclosure to CMS is due within 60 days after the plan year starts, and within 30 days after a change in creditable status. See the Part D CMS Disclosure article.