Medicare Part D Notices Due Before October 15th

September 11, 2025

Each year group health plan (GHP) sponsors that provide prescription drug (Rx) coverage are required to annually disclose to Medicare Part D eligible individuals whether the coverage they offer is “creditable” or “non-creditable.” This is a mandatory annual requirement to inform Medicare-eligible individuals if their employer-sponsored Rx coverage is at least as good as Medicare Part D coverage, which helps them avoid lifetime late enrollment penalties. Plan sponsors must provide this annual disclosure before the start date of the annual Medicare Part D enrollment period, which begins on October 15th each year. This communication outlines what GHPs need to know related to the Part D notice requirements.

Who Must Receive Notice and Why It Matters

Medicare includes a voluntary Rx benefit for “Part D eligible individuals.” These are individuals who have coverage under Medicare Part A or B and who live in the service area of a Part D plan. Notice must be provided to all Medicare Part D eligible individuals, which may include active employees, disabled employees, COBRA participants and retirees, as well as their covered spouses and dependents. As a practical matter, GHP sponsors will often provide the notices to all plan participants. The Part D notice is important because a Part D late enrollment penalty is imposed on individuals who do not maintain “creditable coverage” for a period of 63 days or longer following their initial enrollment period for the Medicare Rx benefit. Accordingly, the Part D notice information is essential to a Part D eligible individual’s decision whether to enroll in a Medicare Part D plan or stay with the employer plan. Failing to provide the notice could be detrimental to these individuals because if they are not covered by creditable Rx coverage and do not enroll in Medicare Part D when first eligible, they may have to pay higher premiums if they enroll later.

Form of Notice and When to Provide

Medicare Part D notices must be provided prior to the Part D annual coordinated election period—beginning October 15 through December 7 of each year. This means the individual must be provided with the notice at least once annually in every 12-month period ending on October 14, which is just before the start date of the Part D annual period. Plan sponsors must also provide notice at various other times as required under the law, including to a Part D eligible individual when he/she joins the plan, upon request, and if the Rx benefit ever changes from creditable to non-creditable (or vice versa). CMS has provided English and Spanish model disclosure notices that can be tailored by plan sponsors to satisfy their notice obligation. See the CMS Creditable Coverage web page for general Part D notice guidance for employer and union-sponsored plans.

How Notice Must Be Provided

As a practical matter, GHP sponsors will often provide the disclosure notices to all plan participants by including the notice in the new hire and annual open enrollment materials:

1. If a plan sponsor chooses to provide the disclosure notice with other plan participant information, the creditable coverage disclosure must be prominent and conspicuous. This means that the disclosure notice portion of the document—or a reference to the section in the document that contains the disclosure notice portion—must be prominently referenced in at least 14-point font in a separate box, bolded or offset on the first page of the provided plan participant information.
2. As a general rule, a single disclosure notice may be provided to the covered Medicare beneficiary and all of his/her Medicare Part D-eligible dependents covered under the same plan. However, if it is known that any spouse or dependent who is eligible for Medicare Part D lives at a different address than where the participant materials were mailed, a separate notice must be provided to the Medicare-eligible spouse or dependent residing at a different address.
3. The notice may be sent electronically under certain circumstances. CMS has issued guidance indicating that health plan sponsors may use the electronic disclosure standards under DOL regulations in order to send the creditable coverage disclosure notices electronically. Also, if a plan sponsor uses electronic delivery, the sponsor must inform plan participants that they are responsible for providing a copy to their Medicare-entitled dependents, and the sponsor must also post the current version of their notices on their websites.

Creditable Coverage Status Determined for Each Applicable Option

GHPs subject to the notice requirement include health plans as defined under ERISA, including certain account-based medical plans, as well as GHPs sponsored for employees or retirees by unions, churches, and federal, state, or local governments. The notice requirements apply to insured and self-funded plans, regardless of plan size, employer size, or grandfathered status. For a list of entities subject to the Medicare D disclosure requirement, see Entities Required to Provide Disclosure to All Medicare Eligible Individuals.

1. For plans that have multiple Rx benefit options (e.g., PPO and HDHP), the creditable coverage determination test and related notice obligation must be addressed separately for each benefit option.
2. Before preparing the notices, a plan sponsor must first determine whether the Rx coverage is “creditable.” While Conner Strong & Buckelew can assist with this determination, often it is the insurance carriers and third party administrators that will determine whether or not the Rx coverage is creditable for purposes of Medicare Part D.
3. In general, to be creditable, the expected amount of paid claims under the plan sponsor’s Rx coverage must be at least as much as the expected amount of paid claims under the standard Medicare Rx benefit. CMS guidance provides two ways to make this determination, through a simplified (safe harbor) determination or actuarially. CMS has offered an “existing simplified method” for determining creditability, but given changes to Medicare Part D under the Inflation Reduction Act of 2022 they revised the simplified determination method. Under the “revised simplified method”, GHP coverage must be designed to pay, on average, at least 72% of participants’ Rx expenses (versus 60% under the existing methodology) to be considered creditable coverage. For now, CMS has decided to continue to permit use of the existing simplified method, without modification, for calendar year 2026 for GHP sponsors who are not applying for the retiree drug subsidy (RDS). Therefore, for calendar year 2026 only, non-RDS plans are permitted to use either the existing simplified method or the revised simplified method.  Pending future guidance, the revised simplified determination method may be used for all plan years beginning in calendar year 2026.

Related Online CMS Disclosure

A related Medicare Part D disclosure rule requires that sponsors complete the Online Disclosure to CMS Form to report the creditable coverage status of their Rx plan(s). This online disclosure should be completed annually no later than 60 days from the beginning of a plan year (contract year, renewal year), within 30 days after termination of an Rx plan, or within 30 days after any change in creditable coverage status. See our previous update for more information on this requirement.

Should you have questions about this or any aspect of group health plan requirements, contact your Conner Strong & Buckelew account representative toll free at 1-877-861-3220. For a complete list of Legislative Updates issued by Conner Strong & Buckelew, visit our online Resource Center.