Questions about creditable coverage, answered.
What the rule requires, when the deadlines fall, and what Creditable does about them. If your question is not here, send it over and we will answer it.
What the rule is
What is Medicare Part D creditable coverage?
Coverage that is expected to pay, on average, at least as much as standard Medicare prescription drug coverage. Learn more about how the rule works.
What is the actuarial value threshold for creditable coverage?
The plan has to be expected to pay at least as much as the CMS defined standard benefit for that plan year. For 2027 that means an actuarial value of 73% or higher.
What happens if an employee does not have creditable coverage?
They may face a permanent Part D late enrollment penalty if they delay signing up without having creditable coverage.
What happens if a plan is not creditable?
Not creditable is a legitimate outcome. It does not need fixing and it is not a compliance failure.
What it changes is what you tell people. The notice has to say the coverage is not creditable, so anyone eligible for Medicare can make a decision about Part D with accurate information rather than finding out later.
Who is responsible, and by when
Who is required to send a creditable coverage notice?
Employers offering prescription drug coverage to Medicare eligible individuals. If you are not sure whether that includes you, contact us and we will help you work it out.
When is the participant notice due?
October 15 each year, before the annual Medicare enrollment period opens. Creditable generates the notice from the determination so it is ready to go out.
When is the CMS disclosure due?
Within 60 days of the start of each plan year. If your plan year starts January 1, that is March 2. If it starts July 1, that is August 30.
Am I required to keep documentation of the determination?
There is no CMS form for this and no filing where you attach your work. What matters is being able to show later what the determination was, what it was based on, and that the notices went out.
That question tends to arrive years after the plan year closed, usually because someone has already been penalized. Every determination run in Creditable keeps its inputs, method, parameters and outcome together, per plan, per plan year.
What happens if the determination or the notice is wrong, or never goes out?
The person in the plan carries the consequence. They make a Part D decision based on what you told them, or based on nothing at all, and the late enrollment penalty attaches to them permanently.
From there it comes back to the plan sponsor, who is asked what was determined and when the notice was sent. A determination that was never documented is difficult to defend after the fact, and it is hard on the relationship with the people it affected.
Can brokers determine creditable coverage on behalf of their clients?
Yes, and most do. The obligation stays with the client as plan sponsor, but the work does not have to.
Working out whether your plan is creditable
How do I know whether our plan is creditable?
Through an actuarial evaluation. You can commission one, or run it in Creditable, which calculates actuarial value against the CMS defined standard benefit for that plan year.
Does this apply if our plan is fully insured?
Yes. The requirement attaches to the coverage, not to how it is funded.
Some carriers provide a creditable coverage statement for fully insured plans and it is worth having. The obligation still sits with the plan sponsor, and a carrier statement does not always address each prescription drug design separately.
Do we need to run it again if the drug design changes mid-year?
Yes, if the change could move the plan across the threshold. Creditable status is a statement about a specific design, so when the design changes the determination behind it is out of date, and participants have to be told when the status changes.
Re-runs inside the same plan year are included in the price.
Using Creditable
How does Creditable determine whether a plan is creditable?
You upload the summary of benefits and coverage. The system reads the prescription drug design out of it and shows you the fields, so you can correct anything before it runs.
It then calculates actuarial value and compares it against the CMS defined standard benefit for that plan year. The determination and the notices come out of the same run.
What documentation do I get from a determination?
Three things. The determination record, holding the inputs, the method, the parameters that applied in that plan year and the outcome. The CMS disclosure. The participant notice.
All three are generated from the same run, so what you send matches what was tested.
Can I manage multiple clients or groups in one place?
Yes. Every client and every plan design sits in one view, with each plan year start date, the determination status, and the CMS disclosure deadline that follows from it. Plan years do not line up across clients, so the deadlines do not either.
Can TPAs and benefits firms use Creditable?
Yes. TPAs and benefits firms run this across every client they administer, which is what the dashboard is built for.
Can I offer Creditable under my own brand?
White label is available today. Embedded options are not, and we would rather say that than promise a date.
Get in touch and we will tell you which of our partnership models fits.
Related reading
Medicare Part D creditable coverage, explained
What the rule requires, how the benchmark is set, and what happens when coverage comes back not creditable.
ReadWho is responsible for creditable coverage?
The obligation sits with the employer sponsoring the plan, whoever happens to do the work. Includes a responsibility matrix.
ReadStill have a question?
Send it over. If it comes up often enough it ends up on this page.