FAQ: To whom must employers distribute the Medicare Part D Creditable Coverage notice?

Medicare Part D Creditable Coverage notices must be distributed to all "Part D eligible individuals" who are "enrolled in or seeking to enroll" in the employer's prescription drug plan. The notice is due annually by October 14 and discloses whether the plan’s prescription drug coverage is creditable (i.e., whether, on average, the prescription drug coverage pays benefits at least equal to the benefits available through the Medicare prescription drug benefit).

Part D eligible individuals include those who are enrolled in either Medicare Part A or B and live in the service area of a Part D plan. Notably, individuals who are incarcerated or living abroad are not considered to be residing in the service area of a Part D plan.

Part D eligible individuals must receive the notice if they are enrolled in or seeking to enroll in the plan. While the guidance doesn’t specify when an individual is "seeking to enroll" in a plan, it’s likely that CMS meant for employers to include participants who are eligible for the employer’s prescription drug coverage (even if they’re not currently enrolled).

Given the concepts above, it’s widely considered a best practice for employers to distribute the notice to all plan-eligible participants. Since employers don’t always know when an employee, spouse, or dependent is enrolled in Medicare for reasons other than age (i.e., disability or end-stage renal disease), distributing the notice to all eligible participants will ensure that the employer meets their compliance obligation to provide the notice to all Part D eligible individuals.