Unintended Consequences of Inflation Reduction Act

Creditable Prescription Coverage for People That Delayed Medicare

What’s happening?

This could be a big impact for people that have delayed Medicare because they still have coverage from their employer or their spouse’s employer.

Previously, most of the plans met the Part D (prescription drug coverage) minimum requirements for creditable coverage. That meant you could delay Medicare and stay on that group plan. 

When you wanted to start Medicare, you were able to do that penalty free.

But there is a big change coming in 2025. Many of those same group plans will no longer be considered creditable coverage for prescriptions. So people that remain on those plans WILL pay a penalty when they start Medicare later.

Big problem.

How do you know if your plan is creditable?

You will get a notice in early October stating your plan is still creditable. Or stating it’s no longer going to be creditable.

The problem this creates is October and November are extremely busy for anyone working with Medicare including insurance agents, companies, Medicare and Social Security employees. 

The fall enrollment period allows people to change their plans for the following. That period starts on October 15th and runs through December 7th. So this is forcing people to make decisions about their employer coverage at the same time as people are reviewing the current Medicare coverage.

Be prepared for processes to take longer than normal at this time.

Official Communication

The Medicare Modernization Act (MMA) requires employer groups whose health plans include prescription drug coverage to tell Medicare-eligible employees and/or dependents if their prescription drug coverage is considered “creditable coverage.” These notices must go to all Medicare-eligible employees and dependents before the October 15 Medicare Part D enrollment period.

The Inflation Reduction Act forced Medicare Part D plans to redesign their benefits for 2025. This change will cause some commercial plans to move to a non-creditable status over the next two years.

Employers who have plans that no longer meet the standard for creditable coverage will have three options:

• Disclose to their employees that their plan no longer meets this creditable coverage standard [mandated requirement].
• Replace potentially non-creditable plans with those that offer creditable coverage based on the new designs for 2025 and 2026.
• Add a plan that offers creditable coverage based on the new designs for 2025 and 2026

Now what?

Call me at 608-571-4461 or complete the form below if you’d prefer to have a one-on-one conversation about your situation.