Notice of Creditable/Non-Creditable Coverage

Notice of Creditable/Non-Creditable Coverage

Generally speaking, if you are an employer offering a group health plan to your employees, you are likely required to inform your Medicare eligible employees as to whether or not your company’s health plan provides creditable prescription drug coverage (employers required to provide notice).

These “Notices of Creditable/Non-Creditable Coverage” specifically indicate whether the plan’s prescription drug coverage pays, on average, as much as the standard Medicare prescription drug coverage (creditable coverage defined).  This information therefore assists the individual with deciding whether or not to enroll in Medicare and must be sent annually to the applicable recipients by October 15 of each year.

Keep in mind that there are two components to this notice requirement according to the Center for Medicare and Medicaid Services (CMS):

  1. A written disclosure notice to all Medicare eligible individuals who are covered under its prescription drug plan. This disclosure must be provided to Medicare eligible active working individuals and their dependents, Medicare eligible COBRA individuals and their dependents, Medicare eligible disabled individuals covered under your prescription drug plan and any retirees and their dependents. CMS provides instructions and model notice templates for employer use.
  2. Completion of the Online Disclosure to CMS Form to report the creditable coverage status of their prescription drug plan.

Every year employers either drag their feet with this obligation, assume their insurance company or broker will provide it, or will simply forget to send this Notice of Creditable/Non-Creditable Coverage altogether.  If these scenarios sound familiar to you and your company, this year will be different.

Why?  Because you are being explicitly reminded NOW to speak with your insurance company and broker to prepare these notices!  While you are at it, there are numerous other employment notices and materials that employees should receive on an annual basis.  Many employers find that distributing required annual notices at the same time each year helps simplify their employee notice obligations while properly informing employees regarding their various rights and responsibilities.  Knowing what, precisely, is required of you and your organization, is critical to avoiding employment practices liability.  Working with trained and experienced professionals is always advised.

This article does not constitute legal nor tax advice, and the reader should consult legal counsel to determine how this information applies to any specific situation.


Attorney Joe Camilli practices at Neider & Boucher, S.C. in the firm’s business team.  He has a master’s degree in Applied Economics from Marquette University and studied healthcare law at Hamline University School of Law, acquiring his Juris Doctorate in 2012, two years after the passage of the ACA.  If you have any questions regarding this article, please contact Joe Camilli at Neider & Boucher, S.C. at 608-661-4500.