Creditable coverage testing for the plans you sponsor.
Every plan year, everyone in your plan who is eligible for Medicare is owed a determination and a notice. Creditable produces both, and keeps the record behind them.
If you offer prescription drug coverage, this applies to you.
The requirement attaches to the coverage itself. If your group health plan includes prescription drug coverage and anyone covered by it is eligible for Medicare, you owe them a determination and a notice for every plan year. How the plan is funded and how many people are on it do not change that.
Medicare eligibility is not only a question of age. It includes people covered through disability and people with end stage renal disease, which is why this reaches plenty of employers who assume they have nobody eligible.
The rule is 42 CFR 423.56 and it names the plan sponsor. That is the employer. A carrier, a third party administrator or a broker can do the work for you. The duty still sits with the entity sponsoring the plan.
Some employers do get a creditable coverage statement from a carrier. It is worth having, but it is not the same as holding the determination and the inputs behind it, and it will not always address each prescription drug design separately.
What you end up holding.
Every run produces one record. The outcome is on it, and so is everything the outcome was based on.
Brightwater Foods PPO
2027 plan year · Record 2027-0142
The plan as tested
- Deductible
- $250
- Generic
- $12 copay
- Preferred brand
- 25% coinsurance
- Non-preferred brand
- 40% coinsurance
- Specialty
- 33% coinsurance
- Out of pocket maximum
- $4,800
- Formulary
- Four tiers, open
How it was measured
- Method
- Actuarial equivalence
- Compared against
- CMS defined standard benefit
- Plan year parameters
- 2027
- Actuarial value
- 78.4%
- Threshold for 2027
- 73.0%
- Result
- Above by 5.4 points
Two years from now an employee gets a letter about a Part D late enrollment penalty and asks why they were never told. This is the document that answers it. The version of the plan that was tested, what it was tested against, and the notices that went with it.
Two dates, every plan year.
One is the same for every employer. The other depends on when your plan year starts.
October 15
Participant notice
Everyone in your plan who is eligible for Medicare gets a notice before the annual Medicare enrollment period opens. It tells them whether their prescription drug coverage is creditable, so they can decide about Part D without taking a penalty later.
60 days
CMS disclosure
Filed to CMS within 60 days of the start of your plan year. If your plan year starts January 1, that is March 2. If it starts July 1, that is August 30. It is easy to miss because it does not sit on the same calendar as the participant notice.
There are also notices tied to individual events, including when someone first becomes eligible for your plan, when the creditable status of your coverage changes, and when a person asks for one.
What you get.
- A determination for every drug design
- Not one answer for the whole plan. If you offer three prescription drug designs, you get three determinations. Two designs with different tier structures can land on opposite sides of the threshold.
- Notices written from the record
- The participant notice and the CMS disclosure come out of the same run that produced the determination, so what you send matches what was actually tested.
- Mid-year changes
- Change the prescription drug design and run it again. Re-runs inside the same plan year are included, so there is no reason to leave a stale answer in place.
- Prior years stay available
- Pull the 2027 determination in 2030, with the parameters that applied in 2027, without going back to whoever ran it at the time.
Bring us the plan you sponsor.
Send the summary of benefits and coverage and we will show you the determination and the notices that come out of it.