Executive Summary

With the October 15 start of the Medicare Part D annual election period looming comes the reminder that the Part D Notice of Creditable Coverage and/or Non-Creditable Coverage (collectively, the “Notice”) is due to employees prior to that October 15 start date. The purpose of the Notice is to inform employees whether their employer-sponsored group health plan’s prescription drug coverage is at least as rich as a Medicare Part D plan.

Who Must Receive the Notice of Creditable Coverage?

Technically, employers must provide the Notice only to “Part D eligible individuals” who are enrolled or seeking to enroll in the employer’s prescription drug coverage. This includes all individuals enrolled in Medicare Part A or Part B who live in the service area of a Part D plan.

As a practical matter, employers will not know which employees, spouses, or dependents are enrolled in Part A or Part B, and they will not know which individuals are seeking to enroll in the employer’s plan. Therefore, employers generally provide the Notice to all employees.

• Best Practice: Provide the Notice to all employees. It’s not realistic to attempt to target the Notice to only Part D eligible individuals.

Where Are the Model Notices?

CMS posts model versions of the Notice of Creditable Coverage and the Notice of Non-Creditable Coverage in English and Spanish.

• _Note: CMS recently updated the webpage that contains the model Notice, but it has not updated the model Notice since 2011. _

How To Provide

Employers can provide the Notice by three different methods:

1. Paper delivery by first-class mail;

2. Paper delivery by hand; or

3. Electronic delivery where permitted.

CMS states that electronic delivery is permitted to “plan participants who have the ability to access electronic documents at their regular place of work if they have access to the plan sponsor’s electronic information system on a daily basis as part of their work duties.”

This electronic delivery standard generally follows the ERISA electronic disclosure safe harbor.

Combining With Other Materials

Employers may also provide the Notice with other materials, including open enrollment materials or other required annual notices (e.g., CHIP, WHCRA), as long as the Notice is “prominent and conspicuous.”

• For more details, see: The 2023 Required Annual Notices to Employees.

If the Notice is not on the first page of any such materials, the first page should include a separate box that is bolded or offset on the first page and prominently references the Notice in at least 14-point font.

CMS provides the following model first-page box language:

• If you (and/or your dependents) have Medicare or will become eligible for Medicare in the next 12 months, a Federal law gives you more choices about your prescription drug coverage. Please see page xx for more details.

Why the Notice Matters: The Late Enrollment Penalty

One unusual aspect of the Notice requirements is that there are no specific penalties for an employer’s failure to provide it. However, Part D eligible individuals who fail to maintain creditable coverage for a period of 63 continuous days or more will face a late enrollment penalty when they eventually enroll in Part D.

The Part D premium may go up by at least 1% of the Medicare base beneficiary premium for every month a Part D eligible individual is without creditable coverage (e.g., permanent 19% Part D premium increase for 19-month gap in creditable coverage).

• Bottom Line: Employees enrolled in creditable coverage need the Notice so they can prove they maintained creditable coverage when later enrolling in Part D. Employees enrolled in non-creditable coverage need the Notice to be informed of the late enrollment penalty if they do not choose to enroll in a Part D plan during the Medicare open enrollment period (or a different employer-sponsored plan option that provides creditable coverage).

One Other Part D Disclosure Requirement

Keep in mind that there is also a separate requirement for the employer to disclose to CMS within 60 days of the beginning of their plan year whether their plan provides creditable coverage. For employers with a calendar plan year, the filing deadline is March 1, 2023.

For more details, see

• Disclosure to CMS Form

• Creditable Coverage Disclosure to CMS Guidance

• Creditable Coverage Disclosure to CMS Instructions & Screen Shots

Where Can I Find More Employer-Related Medicare Information?

The following materials provide additional Medicare information for employers:

• Newfront Medicare for Employers Guide

• How COBRA and Medicare Interact for Retirees

• The Medicare Enrollment COBRA Extension

• How Medicare Affects HSA Eligibility

• Early Termination of COBRA Upon Enrollment in Medicare

• Medicare Secondary Payer Size Thresholds

• Medicare Considerations for Retiring Employees

• Medicare Secondary Payer Prohibition of Employer Opt-Out Incentives

What About the Other Required Annual Notices?

Many employers choose to provide the Medicare Part D Notice of Creditable Coverage and/or Non-Creditable Coverage at the same time as the other annual notices related to employer-sponsored health and welfare plans.

• For a full summary of all the required annual notices and considerations, see: The 2023 Required Annual Notices to Employees.

Links to Required and Recommended Annual Notices

Many employers prefer to provide employees with online access to the annual notice materials. 

Here is a sample message that employers can use to distribute annual notices electronically:

2023 Health Plan Annual Notices

The Company is required by applicable law to provide you with certain notices each year that inform you of your rights and our responsibilities with respect to the Company’s health plan (the “Plan”).

Please carefully review the information contained below and share it with your covered dependents.  We suggest you keep this information with your Summary Plan Description (“SPD”) for future reference. 

[Company’s Plan Provides Part D Creditable Coverage]

• [Medicare Part D Notice of Creditable Coverage](https://pages.newfront.com/rs/209-OQW-293/images/2023 Annual Notices--Part D Notice of Creditable Coverage.pdf)

• Children’s Health Insurance Program (CHIP) Notice

• [Women’s Health and Cancer Rights Act (WHCRA) Notice](https://pages.newfront.com/rs/209-OQW-293/images/2023 Annual Notices--WHCRA-HIPAA SE-ACA PPN.pdf)

• [Notice of HIPAA Enrollment Rights](https://pages.newfront.com/rs/209-OQW-293/images/2023 Annual Notices--WHCRA-HIPAA SE-ACA PPN.pdf)

• [Patient Protections Notice](https://pages.newfront.com/rs/209-OQW-293/images/2023 Annual Notices--WHCRA-HIPAA SE-ACA PPN.pdf)

• [ADA Notice Regarding Wellness Program](https://pages.newfront.com/rs/209-OQW-293/images/2023 Annual Notices--ADA Wellness.pdf)

[Company’s Plan DOES NOT Provide Part D Creditable Coverage]

• [Medicare Part D Notice of Non-Creditable Coverage](https://pages.newfront.com/rs/209-OQW-293/images/2023 Annual Notices--Part D Notice of Non-Creditable Coverage.pdf)

• Children’s Health Insurance Program (CHIP) Notice

• [Women’s Health and Cancer Rights Act (WHCRA) Notice](https://pages.newfront.com/rs/209-OQW-293/images/2023 Annual Notices--WHCRA-HIPAA SE-ACA PPN.pdf)

• [Notice of HIPAA Enrollment Rights](https://pages.newfront.com/rs/209-OQW-293/images/2023 Annual Notices--WHCRA-HIPAA SE-ACA PPN.pdf)

• [Patient Protections Notice](https://pages.newfront.com/rs/209-OQW-293/images/2023 Annual Notices--WHCRA-HIPAA SE-ACA PPN.pdf)

• [ADA Notice Regarding Wellness Program](https://pages.newfront.com/rs/209-OQW-293/images/2023 Annual Notices--ADA Wellness.pdf)

In the event of a conflict between the official Plan Document and these legal notices, the SPD, or any other communication related to the Plan, the official Plan Document will govern.  If you have any questions or would like to obtain a paper version of these notices, please contact People Operations.