Group health plan sponsors offering prescription drug coverage must disclose whether their coverage is creditable or non-creditable to employees by October 15 to align with Medicare Part D open enrollment. During open enrollment, Medicare-eligible individuals who do not have creditable coverage can enroll in Medicare Part D and avoid a late enrollment penalty.
Key updates include:
- A three-phase benefit structure: annual deductible, initial coverage, and catastrophic coverage.
- A reduced annual out-of-pocket threshold of $2,000.
- Replacement of the Coverage Gap Discount Program with a Manufacturer Discount Program.
- Adjustments to the financial responsibilities of enrollees, Part D sponsors, manufacturers, and CMS.
- For 2025, the parameters also include an annual deductible of $590, up from $545 in 2024.
EMPLOYER CONSIDERATIONS
Group health plan sponsors – with guidance from brokers, consultants, carriers, and TPAs – will use these new parameters to determine if their prescription drug coverage is creditable for 2025.
The annual disclosure notice to participants can be satisfied by providing a single notice at the same time each year, with additional notices required under certain circumstances, such as before an individual’s Medicare Part D initial enrollment period or upon request.
Plan sponsors are also required to disclose to CMS their creditable coverage within 60 days of the start of the plan year.
ADDITIONAL COVERAGE ON THIS ISSUE
This being such an important topic, we’ve found some additional info that we think may interest you and your employees. A recent article from FORBES goes into further detail on the coverage gap’s closure and its replacement with a $2000 medication cap. Click the link below to read their coverage.