It is important that employers are aware of an important issue regarding employee group health coverage. With significant changes to Medicare Part D on the horizon due to the Inflation Reduction Act of 2022, it’s crucial to evaluate whether the prescription drug coverage you provide will continue to meet the standard of creditable coverage starting in 2025. If your coverage is no longer creditable, your employees over the age of 65 may be facing lifetime premium penalties when they leave coverage in the future to enroll in Medicare.
What’s Happening?
Starting in 2025, Medicare Part D will undergo substantial changes, including the elimination of the coverage gap and a new cap on out-of-pocket expenses for beneficiaries. These changes are designed to offer better protection to Medicare enrollees but could impact whether your current employee health plan is deemed creditable. Creditable coverage means that your prescription drug coverage is expected to pay, on average, as much as the standard Medicare Part D plan. If your coverage is no longer creditable, your employees may face late enrollment penalties should they later decide to enroll in Medicare Part D.
What You Need to Do:
Stay Proactive. We recommend that you immediately request a review from your insurance provider to determine whether your current group health coverage will remain creditable in 2025. Insurance companies often provide an actuarial analysis that can confirm this. If your current plan is not projected to meet the creditable coverage standard in 2025, you may need to consider making adjustments to your employee health plan.
Notify Your Employees. Should your coverage no longer be creditable, you are required to notify your Medicare-eligible employees by October 15 each year. This notification ensures they are aware of their options and any potential penalties if they do not enroll in Medicare Part D when first eligible.
How We Can Help:
We are licensed insurance agents specializing in Medicare coverage for Minnesotans. If your plan is no longer creditable, we can assist your employees in exploring their Medicare options, ensuring they avoid the penalties they will incur on their Part D coverage if they don’t make a change, and that they have continuous, robust coverage for their needs. We would be happy to meet with you to discuss how we can help you navigate these changes and support your employees through the transition, if needed.
Please feel free to reach out to us at 763-878-5994 or info@milestonemedicare.com to schedule a meeting or to discuss how we can assist you in ensuring your team remains covered. We look forward to helping you ensure that your employees are well-informed and adequately covered.
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