Question of the Month – Timing for Medicare Part D Creditable Coverage Notice

Question: Is the Medicare Part D Creditable Coverage Notice Always Due by October 14? Or can I issue it as part of my mid-year plan renewal instead?

Answer: While “Prior to October 15” [or, by October 14] is often touted as the official deadline for issuing the Medicare Part D Notice of Creditable Coverage (the “Notice”), the reality is that the actual timing requirement for the Notice is a bit more flexible.

Technically, the Notice is required to be provided to Medicare Part D eligible individuals at the following times:

  1. Prior to commencement of the annual enrollment period for Part D (Oct 15);
  2. Prior to an individual’s initial enrollment period (IEP) for Part D;
  3. Prior to the effective date of coverage for any Part D eligible individual who enrolls in the plan sponsor’s prescription drug coverage;
  4. Whenever the employer no longer offers prescription drug coverage or changes it so that it is no longer creditable or becomes creditable; and
  5. Upon request by the Part D eligible individual.

It is important to note that the first three occasions use the term “prior to,” which according to CMS means within the last 12 months. Therefore, an employer can meet the first three timing requirements by providing the notice at the following times:

  • Each year during the employer’s open enrollment period, or in late September/early October to coincide with the Medicare Part D open enrollment period; and
  • When individuals are first eligible for the prescription drug coverage (e.g., new hires).

If an employer provides the notice any time after October 15 of the prior year – e.g., in late spring for a June 1 renewal, then it has met its obligation to provide the Notice “prior to” October 15 and does not need to provide the notice again in October of that year. For employers with non-calendar year plan years, it may be administratively easier to time issuance of the notice with their plan renewal instead of waiting until October.

On the other hand, employers should keep in mind that the October 14 deadline is meant to coincide with the start of the annual Medicare Annual Open Enrollment Period (AEP), and therefore provision of the Notice at that time may be most beneficial to individuals who are making decisions about Medicare coverage.

The bottom line is that as long as an employer is providing the Notice at least once annually (and as required for new hires or to communicate changes to the plan’s creditable status), it does not matter whether the notice is provided earlier in the year or in October. For employers with non-calendar year plans especially, there may be pros and cons to providing it earlier in the year.

While every effort has been taken in compiling this information to ensure that its contents are totally accurate, neither the publisher nor the author can accept liability for any inaccuracies or changed circumstances of any information herein or for the consequences of any reliance placed upon it. This publication is distributed on the understanding that the publisher is not engaged in rendering legal, accounting or other professional advice or services. Readers should always seek professional advice before entering into any commitments.