Medicare Part D creditable/non‑creditable coverage disclosure to CMS due March 2, 2026

Employers with group health plans that provide prescription drug coverage to Medicare‑eligible individuals must submit an annual disclosure to the Centers for Medicare & Medicaid Services (CMS) indicating whether their prescription drug coverage is creditable or non‑creditable. Creditable coverage means the plan’s actuarial value is expected to equal or exceed the actuarial value of standard Medicare Part D coverage.

For calendar‑year plans, this disclosure is due no later than March 2, 2026 (60 days after the start of the plan year). The filing must be completed electronically via the CMS website and applies to both self‑funded and fully insured plans—regardless of whether prescription drug coverage is primary or secondary to Medicare.

The disclosure must be submitted:

• Within 60 days after the start of the plan year (March 2, 2026 for calendar‑year plans)

• Within 30 days after termination of the prescription drug plan

• Within 30 days after any change in creditable status

Completing the disclosure to CMS form

Reporting must be completed online through the disclosure to CMS form (opens a new window). Before completing the form, plan sponsors are encouraged to consult the instructions (opens a new window) provided by CMS.

Key areas include:

• Entities with subsidiaries: One filing may be submitted if plan years align across entities. If coverage types are uniform, the parent company’s EIN may be used.

• Number of options offered: Count all medical plan options (HMO, PPO, HDHP, etc.), excluding options already claimed under the retiree drug subsidy program.

• Creditable coverage status: Plans may report in aggregate if all options are either creditable or non‑creditable. If mixed, options should be grouped accordingly.

• Number of Part D‑eligible individuals: Estimate those expected to be covered as of day one of the plan year (active employees, dependents, retirees, COBRA participants). Carriers, TPAs, and PBMs may assist.

Disclosure to plan participants

CMS requires plan sponsors to report the date that Medicare Part D Creditable/Non‑Creditable Notices were distributed to Medicare‑eligible individuals. This includes active employees, retirees, spouses and dependents enrolled in the plan.

Notices must be distributed:

• Before the annual Part D enrollment window (opens Oct. 15)

• Before the individual’s initial enrollment period (IEP) for Part D

• Before enrollment in the employer’s plan

• Whenever drug coverage ends or creditable status changes

• Upon request

LOCKTON COMMENT: A single annual distribution may satisfy the first two bullets. Lockton recommends including the creditable or non‑creditable notice in open enrollment materials and new hire packets. Because plan sponsors often cannot identify all Medicare‑eligible dependents, distributing notices to all enrolled and enrolling individuals is the safest approach.

Plans exempt from filing

Plans that do not offer prescription drug coverage to any Medicare‑enrolled individual at the start of the plan year are exempt. Employers qualifying for the Medicare Part D retiree drug subsidy are also exempt – but only for the individuals and plan options covered under the subsidy.

LOCKTON COMMENT: Because exemptions are narrow and difficult to verify, most employers should file the CMS disclosure to ensure compliance.

Not legal advice: Nothing in this alert should be construed as legal advice. Lockton may not be considered your legal counsel, and communications with Lockton's Compliance Consulting group are not privileged under the attorney-client privilege.

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