Creditable Coverage Information for Small 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. These are definitions of creditable and non-creditable coverage:
Creditable coverage: A health plan's prescription drug coverage is creditable when 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 notify Medicare-eligible members whether their current plan is or is not 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 if they choose to purchase a Medicare PDP in the future. There are no forms to fill out for this choice.
2. Purchase a Medicare 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 did not choose to enroll in a Medicare PDP when they first became eligible. Within 63 days of enrolling in a Medicare PDP, employees must have the prescription drug coverage removed from their current plan per federal law.
|Blue Shield Plan Type||Creditable Plans||
|Small group (2-100 eligible employees)||All plans except those listed in the Non-Creditable Plans column.||
Web Resources – Medicare Part D
To learn more about Medicare Part D and how it can affect your Medicare-eligible retirees, see the following:
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Page last updated: 10/19/2022