Part D Creditable Coverage 2025

[kgmom219]

I just sent this out internally and thought I would share. Hope it helps!

Issue

• People over 65 who are still working need to have creditable drug coverage or risk becoming late enrollees later, with a lifetime penalty. Every October, employers are required to notify their employees if the group coverage is creditable or not for Medicare Part D. Right now, 99.9% of group plans are creditable vs Part D and it’s a non-issue.
• For 2025, no one seems to know the answer on what is creditable or not. I got with the actuary who did the TX ACA alignment and he said that “in general” fully insured plans will be creditable, but self-funded plans are a crapshoot. Assume that any employer over 100 employees is self-funded, but it really doesn’t matter. We need to know what the letter says in October. We can’t guess.

Game Plan

• I’m getting in front of Financial Planners now with this potential issue. One, so we look smart and sound pretty. Two, I am NOT dealing with panic calls on October 15. No. No. No.
• Financial Planners are identifying anyone over the age of 65, who is not on Medicare.
• Financial Planners will be sending emails to their clients (copying me) the first week of August. We need another friggin tab on the spreadsheet.
  • Under 5 people? That’s individual meetings in August and that’s fine
  • A lot of people? We will be doing a Zoom meeting per planner.
• If they are not enrolled in Part A AND not contributing to an HSA account, we are getting them enrolled in Part A prior to October 1.
• If they need a Part D plan, its going to be an individual answer on what we do. And I can’t even guess on the answer until we get the Part D premiums for 2025. In September. Plus, most of these people will be IRMAA, so that’s in play as well. SUPER DUPER FUN!
• Financial Planners are aware that if its not an easy answer, the client enrollment meetings will occur after Dec 7th and I will being telling the clients that as well. Technically, they have until March 1 to enroll, without a penalty.

 

[somarco]

FWIW in the 90's I tried to get health insurance carriers to define creditable coverage which allows the pre-ex clause to be waived. (This predates Obamacare).

Not a single one I talked with could give me a workable definition.

It was more like, "We can't define it but I will know it when I see it . . ."

 

[kgmom219]

FWIW in the 90's I tried to get health insurance carriers to define creditable coverage which allows the pre-ex clause to be waived. (This predates Obamacare).

Not a single one I talked with could give me a workable definition.

It was more like, "We can't define it but I will know it when I see it . . ."

That’s what they saying right now. But until the plans are finalized (self funded side) who knows

 

[Midlevel]

Has CMS ever checked to see if their coverage was credible? I imagine most just mark they had employer coverage from when they turned 65 until their Medicare Part B started and no one questions it.

 

[kgmom219]

Not going there.

But I hear you.

 

[yorkriver1]

With the new more generous Rx coverage I assume this is the deal with what's next for creditable coverage notices. So glad I saw this now. Thanks! There is a VP of compliance at the firm I work with for group coverage (large operation) who I will suggest to be in touch with the law firm that works on insurance and HR compliance consulting for them.

 

[yorkriver1]

Reply from the compliance VP at my upline for group & ACA coverage:
Currently, we receive CC (creditable coverage) information for all plans within a calendar year, so the 1/1/25 change is not included for a 2024 plan year. Creditable HDHP (CC) plans covering preventive prescriptions before the deductible might be non-creditable (NC) as of 1/1/25
We are reaching out to our carrier/TPA partners on this to see what changes they will make to the CC and NC lists in advance of 1/1/25.

 

[Yagents]

You got to love this comment from NABIP bashing gov't word salads.

"The purpose of this update is to improve the guidance by condensing the text, providing additional clarifications, and utilizing plain language."

NAHU Washington Update - 08/09/2024

Creditable Coverage and Late Enrollment Penalty | CMS

Creditable Coverage Period Determinations and Late Enrollment Penalty under Part D

www.cms.gov

 

[Special Agent]

You got to love this comment from NABIP bashing gov't word salads.

"The purpose of this update is to improve the guidance by condensing the text, providing additional clarifications, and utilizing plain language."

NAHU Washington Update - 08/09/2024

Creditable Coverage and Late Enrollment Penalty | CMS

Creditable Coverage Period Determinations and Late Enrollment Penalty under Part D

www.cms.gov

Sounds like CMS realizing that incentivizing more working medicare eligibles to enroll in the improved costlier part D program for 2025 is a better idea when the insurance companies are eating the additional cost but not so much when the taxpayers have to pay for it.

 

[GoPokes]

Sounds like CMS realizing that incentivizing more working medicare eligibles to enroll in the improved costlier part D program for 2025 is a better idea when the insurance companies are eating the additional cost but not so much when the taxpayers have to pay for it.

They certainly are rethinking their "final" determination. Id love to see the edit to the "final" be titled "ultimate" or "super final."

What does this update really say?

It says it's "revised" ... but it doesnt explicitly say anthing that looks different than it has been
...
20.1 – What is Creditable Prescription Drug Coverage

Creditable coverage meets Medicare’s minimum standards since it is expected to pay, on average, at least as much as Medicare’s standard prescription drug coverage.
Certain types of prescription drug coverage may be considered creditable, such as drug coverage from a former employer or union, TRICARE, Veterans Affairs, the Federal Employee Health Benefits Program, or the Indian Health Service. Each entity that offers prescription drug coverage is required to determine if the coverage they offer is creditable—for more information on this, see § 20.2.
Individuals may have prescription drug coverage that is not considered creditable. These forms of prescription drug coverage are considered non-creditable coverage, and include prescription drug discount cards, free clinics, or drug discount websites.

20.2 – Disclosure of Creditable Coverage Status to Part D-Eligible Individuals and CMS

NOTE: The below disclosure requirements to notify CMS and the individual of creditable coverage status do not apply to Part D, Medicare Advantage Prescription Drug (MA-PD), Programs of All-Inclusive Care for the Elderly (PACE), and certain cost plans.
Entities, other than those listed above, that offer prescription drug coverage to Part D-eligible individuals must:
• Determine if the prescription drug coverage offered is creditable or non-creditable coverage;
• Disclose to CMS, on an annual basis, the creditable coverage status of the prescription drug benefit offered; and
• Disclose to all Part D-eligible individuals whether the non-Part D prescription drug coverage they are enrolled in, or seeking to enroll in, is creditable coverage or not, so that such Part D-eligible individuals can make an informed decision about enrolling in Part D.
Entities disclose this information to Part D-eligible individuals at the following times:
• Prior to an individual’s Initial Enrollment Period (IEP) for Part D;
• Prior to the effective date of enrollment, and upon any change that affects whether the drug coverage is creditable;
• Prior to the Annual Election Period (AEP); and
• Upon request by the individual.


...