“Creditable prescription drug coverage” is coverage that meets Medicare's minimum standards since it is expected to pay, on average, at least as much as Medicare's standard prescription drug coverage.
Creditable prescription drug coverage includes, but is not limited to:

• some employer-based prescription drug coverage, including the Federal Employees Health Benefits Program;
• qualified State Pharmaceutical Assistance Programs (SPAPs);
  • **Note: MN does not have SPAPs;
• Tribal coverage;
• Retiree group heath coverage;
• military-related coverage (e.g., VA, TRICARE); and
• certain Medicare supplemental (Medigap) policies.

• Entities that offer prescription drug coverage must make an annual determination of creditable coverage status and provide a disclosure notice to Medicare eligible individuals.  
• Entities disclose this information to Part D-eligible individuals at the following times:
  • Prior to an individual’s Initial Enrollment Period (IEP) for Part D
  • Prior to the effective date of enrollment, and upon any change that affects whether the drug coverage is creditable
  • Prior to the Annual Election Period (AEP)
  • Upon request by the individual

• Changes to Medicare Part D coverage in 2025 will increase the actuarial value of coverage.
• Prescription drug coverage in 2024 that is as rich as or only slightly richer than Medicare Part D may not be creditable in 2025.
• There are two methods that plan sponsors can use to determine whether their prescription drug coverage is creditable in 2025:
  • the simplified determination
  • the actuarial equivalence determination
  • the plan’s insurance carrier or third-party administrator (TPA) is generally able to determine the whether the plan’s coverage is creditable under the simplified determination method.
  • CMS has indicated that they may eliminate the simplified determination method in future plan years, but not in 2025
    • For 2025, there will not be any changes to the creditable coverage calculations and the simple determination can still be used.
    • This means that, beginning in 2026, plan sponsors (or their carrier or TPA) may need to have an actuary determine their plan’s creditable coverage status
    • CMS will provide more guidance in 2025