Employers that sponsor group health plans offering prescription drug coverage should prioritize compliance with the annual Drug Coverage Disclosure to the Centers for Medicare and Medicaid Services (CMS), which is due by March 1 for the prior plan year. Employers should first confirm whether their prescription drug coverage is creditable or non-creditable under Medicare Part D standards by working with carriers, pharmacy benefit managers, or benefits advisors. Once creditable coverage status is confirmed, the disclosure is submitted electronically through the CMS online disclosure form and requires accurate plan year details, coverage type, and creditable coverage status. Employers should assign responsibility for completing the filing, record the deadline, and validate information before submission to reduce compliance risk. From a legal perspective, timely and accurate disclosure supports Employee Retirement Income Security Act (ERISA) fiduciary obligations and helps mitigate potential enforcement concerns. Employers should also ensure that Medicare-eligible employees and their dependents receive required creditable or non-creditable coverage notices in a timely and understandable manner to support informed enrollment decisions. Documentation remains a critical compliance step. Employers should retain confirmation of CMS submission, creditable coverage determinations, and employee notices in a centralized location to support audit readiness, plan changes, and future reporting cycles.
Key Takeaways for Employers
- Confirm Creditable Coverage Status:
Employers that sponsor group health plans with prescription drug coverage should determine whether the coverage is creditable or non-creditable under Medicare Part D standards. This assessment should be completed annually and whenever plan design changes occur. Coordinate with carriers, pharmacy benefit managers, or advisors to obtain written confirmation of creditable coverage status and retain it for compliance records. - Complete the CMS Disclosure Timely:
Employers must submit the online disclosure to the CMS by March 1 for the prior plan year. Assign ownership for submission, add the deadline to the calendar, and verify that the correct plan year, coverage type, and creditable coverage status are reflected before finalizing the filing. - Understand Legal and Compliance Risks:
Failure to submit the disclosure or submitting inaccurate information may expose employers to compliance risk and confusion among participants. Align internal processes with ERISA fiduciary obligations and ensure consistency between CMS disclosures and participant communications. - Communicate Clearly with Employees:
Provide required creditable or non-creditable coverage notices to Medicare-eligible employees and dependents. Ensure notices are distributed at the required times and written in plain language to support informed enrollment decisions. - Maintain Strong Documentation Practices:
Retain CMS confirmation receipts, creditable coverage determinations, and employee notices for audit readiness. Centralize records to support future inquiries, plan changes, or vendor transitions.
Federal Government Resources
Additional Articles & Resources
- Medicare Part D: CMS Creditable Coverage Disclosure Reminder | Hylant
- Annual CMS Medicare Part D Disclosure Due for Calendar Year Plans | Marsh McLennan Agency
- Navigating Medicare Part D: 2026 Creditable Coverage Changes & Disclosure Essentials for Employers | Baldwin Group
- Compliance Reminder: Upcoming CMS Medicare Part D Disclosure Reporting Deadline | Risk Strategies
- CMS Finalizes Medicare Advantage, Part D Rule for 2026 | California Hospital Association
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