Medicare Part D Notices Are Due Before Oct. 15, 2025
Each year, Medicare Part D requires group health plan sponsors to disclose to individuals who are eligible for Medicare Part D and to the Centers for Medicare and Medicaid Services (CMS) whether the health plan’s prescription drug coverage is creditable.
Plan sponsors must provide the annual disclosure notice to Medicare-eligible individuals before Oct. 15, 2025—the start date of the annual enrollment period for Medicare Part D. CMS has provided model disclosure notices for employers to use.
This notice is important because Medicare beneficiaries who are not covered by creditable prescription drug coverage and do not enroll in Medicare Part D when first eligible will likely pay higher premiums if they enroll at a later date. Although there are no specific penalties associated with this notice requirement, failing to provide the notice may be detrimental to employees.
Creditable Coverage
A group health plan’s prescription drug coverage is considered creditable if its actuarial value equals or exceeds the actuarial value of standard Medicare Part D prescription drug coverage. In general, this actuarial determination measures whether the expected amount of paid claims under the group health plan’s prescription drug coverage is at least as much as the expected amount of paid claims under the Medicare Part D prescription drug benefit. For plans that have multiple benefit options (for example, PPO, HDHP and HMO), the creditable coverage test must be applied separately for each benefit option.
Model Notices
CMS has provided two model notices for employers to use:
- A Model Creditable Coverage Disclosure Notice for when the health plan’s prescription drug coverage is creditable; and
- A Model Non-creditable Coverage Disclosure Notice for when the health plan’s prescription drug coverage is not creditable.
These model notices are also available in Spanish on CMS’ website.
Employers are not required to use the model notices from CMS. However, if the model language is not used, a plan sponsor’s notices must include certain information, including a disclosure about whether the plan’s coverage is creditable and explanations of the meaning of creditable coverage and why creditable coverage is important.
Notice Recipients
The creditable coverage disclosure notice must be provided to Medicare Part D-eligible individuals who are covered by, or who apply for, the health plan’s prescription drug coverage. An individual is eligible for Medicare Part D if they:
- Are entitled to Medicare Part A or are enrolled in Medicare Part B; and
- Live in the service area of a Medicare Part D plan.
In general, an individual becomes entitled to Medicare Part A when they actually have Part A coverage, and not simply when they are first eligible. Medicare Part D-eligible individuals may include active employees, disabled employees, COBRA participants and retirees, as well as their covered spouses and dependents.
As a practical matter, group health plan sponsors often provide the creditable coverage disclosure notices to all plan participants.
Method of Delivering Notices
Plan sponsors have flexibility in how they must provide their creditable coverage disclosure notices. The disclosure notices can be provided separately, or if certain conditions are met, they can be provided with other plan participant materials, like annual open enrollment materials. The notices can also be sent electronically in some instances.
As a general rule, a single disclosure notice may be provided to the covered Medicare beneficiary and all of their Medicare Part D-eligible dependents covered under the same plan. However, if it is known that any spouse or dependent who is eligible for Medicare Part D lives at a different address than where the participant materials were mailed, a separate notice must be provided to the Medicare-eligible spouse or dependent residing at a different address.
Employer Takeaway
Employers should confirm whether their health plans’ prescription drug coverage is creditable or non-creditable and prepare to send their Medicare Part D disclosure notices before Oct. 15, 2025. As a reminder, “before” means the individual must have been provided the notice within the past 12 months. So, if it was provided with last year’s open enrollment materials on or after Oct. 16, 2024, that will suffice.
New Order Directs Federal Agencies to Expand 401(k) Investment Options
On August 7, 2025, President Donald Trump issued an executive order titled Democratizing Access to Alternative Assets for 401(k) Investors. The order directs federal agencies to review existing guidance regarding alternative investments in 401(k) and other defined-contribution retirement plans and instructs them to take steps to make these assets more accessible to plan participants.
Key Highlights
According to the order, retirement plan participants should have access to funds that include investments in alternative assets “when the relevant plan fiduciary determines that such access provides an appropriate opportunity for plan participants and beneficiaries to enhance the net risk-adjusted returns on their retirement assets.”
Specifically, the order directs the U.S. Department of Labor (DOL) to:
- Reexamine its guidance on a fiduciary’s duties regarding alternative asset investments in ERISA-governed 401(k) and other defined-contribution plans;
- Clarify its position on alternative assets and the appropriate fiduciary process associated with offering asset allocation funds containing investments in alternative assets; and
- Consult with the Secretary of the Treasury, the Securities and Exchange Commission (SEC), and other federal regulators to determine whether parallel regulatory changes should be made to align with the order’s objectives.
In addition, the order directs the SEC to revise applicable regulations and guidance to facilitate access to alternative assets for participant-directed defined-contribution retirement savings plans.
DOL Supporting Statement
The DOL separately released a statement on August 7, 2025, applauding the executive order and highlighting the DOL’s recent rescission of prior guidance that, according to the agency, disadvantaged cryptocurrency in 401(k) plans. The DOL noted that the executive order “further supports [its] efforts to improve flexibility and eliminate unfair one-size-fits-all approaches[.]”
The White House also released a fact sheet summarizing the executive order’s intent and scope.
Employer Takeaway
Plan fiduciaries overseeing or permitting investments in digital assets or other alternative investments should continue to closely monitor for regulatory developments in this area and consult with their benefit advisors to ensure full compliance with ERISA’s fiduciary responsibilities.
Preparing for 2026 Open Enrollment
To prepare for open enrollment, employers that sponsor health plans should be aware of compliance changes affecting the design and administration of their plans for plan years beginning on or after Jan. 1, 2026. These changes include limits adjusted for inflation each year, such as the Affordable Care Act’s (ACA) affordability percentage and cost-sharing limits for high deductible health plans (HDHPs). Employers should review their health plan’s design to confirm that it has been updated, as necessary, for these changes.
In addition, any changes to a health plan’s benefits for the 2026 plan year should be communicated to plan participants through an updated Summary Plan Description (SPD) or a Summary of Material Modifications (SMM). Health plan sponsors should also confirm that their open enrollment materials contain certain required participant notices, such as the summary of benefits and coverage (SBC), when applicable. Some participant notices must also be provided annually or upon initial enrollment. Employers should consider including these notices in their open enrollment materials to minimize costs and streamline administration.
Employer Takeaway
To properly prepare for your 2026 open enrollment, please review our Open Enrollment Checklist and our tips for avoiding common open enrollment mistakes.
