July 29, 2024
Employers who sponsor group health plans must act now regarding the status of their prescription drug coverage in advance of changes to Medicare Part D that go into effect for 2025. The Inflation Reduction Act of 2022 (IRA) made changes to Medicare Part D to enhance benefits and enrollee cost savings, which may significantly impact whether employer sponsored prescription drug benefits continue to qualify as creditable coverage under Medicare Part D. Creditable coverage means that the employer’s prescription drug coverage is at least as good as Medicare Part D coverage.
Employer Action Items
- Contact your carrier, TPA, ASO, or PBM to determine whether your prescription drug coverage is creditable.
- Evaluate deductibles in your prescription drug coverage, in particular any HSA-compatible HDHPs.
- Immediately review and evaluate all benefit options for 2025 in light of the changes to Medicare Part D.
- Develop a participant communication strategy advising affected individuals of the changes to the creditable coverage requirements and the potential impact on HDHPs and other benefit options in 2025.
- Consider a Medicare enrollment guide for employees. Failing to make informed choices can result in significant financial exposure relating to coordination of benefits with COBRA, for example, or in lifetime premium penalties under Medicare for late enrollment.