Employers that offer prescription drug coverage must tell Medicare-eligible employees each year whether that coverage is creditable, meaning at least as good as Part D. The notice is due before October 15 and helps employees avoid a Part D late-enrollment penalty.
Creditable coverage is employer drug coverage that’s at least as good as standard Medicare Part D. Employers that cover Medicare-eligible people must tell them whether their drug coverage is creditable before October 15 each year, and must disclose creditable/non-creditable status to CMS within 60 days of the plan year start.
The Part D late enrollment penalty is a permanent surcharge added to your Part D premium if you go 63 or more days without creditable drug coverage after your initial enrollment period. It’s roughly 1% of the national base premium for each month you went without, for as long as you have Part D.