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 2019 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 2019 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:

  1. 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
  2. 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 1/1/20.

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:

Blue Shield of California is a PDP plan with a Medicare contract. Enrollment in Blue Shield of California depends on contract renewal. The plan is open only to Medicare beneficiaries who are eligible employer group retirees with Part A and/or Part B and who reside in the plan’s service area.

Blue Shield of California complies with applicable state laws and federal civil rights laws, and does not discriminate on the basis of race, color, national origin, ancestry, religion, sex, marital status, gender, gender identity, sexual orientation, age, or disability. Blue Shield of California cumple con las leyes estatales y las leyes federales de derechos civiles vigentes, y no discrimina por motivos de raza, color, país de origen, ascendencia, religión, sexo, estado civil, género, identidad de género, orientación sexual, edad ni discapacidad. Blue Shield of California 遵循適用的州法律和聯邦公民權利法律,並且不以種族、膚色、原國籍、血統、宗教、性別、婚姻 狀況、性別認同、性取向、年齡或殘障為由而進行歧視。

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Page last updated: 01/15/2019