The Medicare Modernization Act requires all employers to provide written notice to Medicare eligible individuals to notify those individuals on whether their plan provides drug coverage that is “creditable,” or “as good as” Medicare Part D coverage. This allows individuals to make an informed decision about whether to remain on an employer plan or enroll in Medicare Part D. Employers must distribute the notice annually by October 15th.


Compliance Snapshot:

  • Employers must inform Medicare Part D eligible individuals on whether their coverage provides drug coverage as good as that provided under Medicare Part D.
  • Employers must distribute the Medicare Part D Notice to employees annually prior to October 15th.


Frequently Asked Questions:

Who should get the notice?

Employers must distribute the notice to individuals eligible for Medicare. Medicare eligibility generally begins at age 65 but individuals can be eligible earlier if disabled or if they have end-stage renal disease. Eligible individuals include those entitled to Medicare Part A or enrolled in Medicare Part B, which can be an active employee, disabled employee, COBRA beneficiary, retiree, or a covered spouse or dependent.

Because it is difficult to determine who may be eligible, it is a best practice to send this notice to all employees, COBRA participants, and expatriate employees. A single notice can be sent to employees on behalf of their dependents, unless an employer is aware that an employee’s spouse or dependent is Medicare Part D eligible and that they reside at a different address.


When must employers distribute the notice?

It is recommended that employers distribute the notice to new hires and to all employees at least annually before October 15th.  In addition, employers should provide the notice when prescription drug coverage ends, when creditable coverage status changes, or upon request.


How can employers distribute the notice?

By Mail:
Delivery of the notice can be made on a stand-alone basis or combined with other documents; however, if combined, the notice must be prominent and conspicuous in at least 14-point font and placed in a separate box. First class mail is preferable and employers should document when the notice is mailed, where it is mailed, and to whom it is mailed.

Electronic Delivery:
The notice may be provided electronically, though only to plan participants who have access to their employers’ electronic information system on a daily basis as part of their work duties. For employees who do not have regular access to electronic media, employers should provide the notice in paper format or collect signed authorizations from those employees consenting to electronic distribution. Employers should always be sure to follow the Department of Labor’s electronic disclosure rules.


Employer Action Item:

Employers should ensure that their Medicare Part D Creditable or Non-Creditable Disclosure Notice has been distributed to all employees prior to October 15th.


Sequoia Clients Only:

Beginning in 2020: If clients have all “creditable” plans, the notice will be located in your Benefits Booklet or Legal Disclosures Packet.  Please ensure this is distributed to all plan participants (including new hires and COBRA participants).

For clients that have any non-creditable plans, clients will receive an email enclosing the requisite Medicare Part D Notice with instructions on how to distribute the notice to employees.


Additional Resources:


The information and materials on this blog are provided for informational purposes only and are not intended to constitute legal or tax advice. Information provided in this blog may not reflect the most current legal developments and may vary by jurisdiction. The content on this blog is for general informational purposes only and does not apply to any particular facts or circumstances. The use of this blog does not in any way establish an attorney-client relationship, nor should any such relationship be implied, and the contents do not constitute legal or tax advice. If you require legal or tax advice, please consult with a licensed attorney or tax professional in your jurisdiction. The contributing authors expressly disclaim all liability to any persons or entities with respect to any action or inaction based on the contents of this blog.

Emerald Law – Emerald is a Client Compliance Consultant for Sequoia, where she works with our clients to optimize and streamline benefits compliance. In her free time, Emerald enjoys stand-up comedy, live music and writing non-fiction.