Creditable Coverage Information for Large Groups
Under regulations issued by the Centers for Medicare & Medicaid Services (CMS), Medicare Part D-eligible individuals must be notified whether their current coverage is "creditable prescription drug coverage" each year. Following are definitions of creditable and non-creditable coverage:
- Creditable coverage: A health plan's prescription drug coverage is creditable if the amount the plan expects to pay, on average, for prescription drugs for individuals covered by the plan in 2023 is the same or more than what standard Medicare prescription drug coverage would be expected to pay.
- Non-creditable coverage: A health plan's prescription drug coverage is non-creditable when the amount the plan expects to pay, on average, for prescription drugs for individuals covered by the plan in 2023 is less than that which standard Medicare prescription drug coverage would be expected to pay.
Employers must inform Medicare-eligible members whether their current plan is creditable prescription drug coverage by October 15. Members in Blue Shield plans that have been determined as creditable do not need to do anything if they're satisfied with the drug coverage they have through these plans.
Members in Blue Shield plans that have been determined to have coverage that is non-creditable may:
- Do nothing and keep their current coverage. If they choose this option, they are not purchasing a Medicare Prescription Drug Plan (PDP) and may incur further late enrollment penalties. There are no forms to fill out for this choice. OR
- Purchase a Medicare Part D PDP during the next Annual Election Period. The late enrollment penalty will apply because the member's current plan is not creditable, and the employee chose not to enroll in a Medicare PDP when they first became eligible. Within 63 days of enrolling in a PDP, employees must have the prescription drug coverage removed from their current plan per federal law.
Creditable status reflects on 1/1/22 and 1/1/23.
Large Groups (101+) Creditable and Non-Creditable Plans
|Blue Shield Plan Type||Creditable Plans||Non-Creditable Plans|
|Large Group||All plans except those listed in the Non-Creditable Plans column.||
All custom plans with a combined Rx/Medical deductible and out-of-pocket maximum must be certified individually.*
* Please contact your Blue Shield account representative for assistance with individual plan certification.
Options for Employers
We will be supporting our large employer groups (101+ eligible employees) with the following three options.
Enhanced or Wrapped Employer Pharmacy Benefits
Blue Shield offers employer groups the option to administer the group's outpatient Rx coverage with our Medicare prescription drug benefit for Medicare-eligible retirees enrolled in the group plan. This option will allow employers to maintain their current pharmacy benefits and take advantage of Medicare Part D legislation without applying for the Employer Retiree Drug Subsidy.
Providing Subsidy-Eligible Employer Support
Employers may be eligible for government subsidy payments if they provide drug coverage that is at least as generous as the Medicare standard drug benefit. The government will subsidize 28% of retirees' drug costs between $415 and $8,500 per person for employers who provide coverage. Qualifying employer coverage may be insured or self-funded. We will support the actuarial and reporting requirements for the employer retiree drug subsidy.
Note: Employers must apply no later than 90 days prior to plan effective date to be eligible for the subsidy payments.
Employer Group Stand-Alone Medicare Prescription Drug Coverage
Employers can purchase an employer group stand-alone Medicare Prescription Drug Plan (PDP) for their Medicare-eligible retirees (spouse and/or dependent). Please contact your Blue Shield of California account representative for more details about our employer group stand-alone Medicare PDP products.
Web Resources – Medicare Part D
To learn more about Medicare Part D and how it can affect your Medicare-eligible retirees, check out the following:
Centers for Medicare & Medicaid Services: Your Guide to Medicare Prescription Drug Coverage
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Page last updated: 10/19/2022