Insights

On April 2, 2018, CMS issued an announcement regarding the Medicare Part D benefit parameters for 2019. As background, employer plan sponsors that offer prescription drug coverage to Part D-eligible individuals must disclose to those individuals and to CMS whether the prescription plan coverage is creditable or non-creditable (as compared to Part D coverage). For coverage to be considered creditable, the actuarial value of the employer’s coverage must be, on average, at least as good as standard Medicare prescription drug coverage.

In the announcement, CMS released the following parameters for the defined standard Medicare Part D prescription drug benefit, which will assist plan sponsors in making that determination:

• Deductible: $415 (a $10 increase from 2018)
• Initial coverage limit: $3,820 (a $70 increase from 2018)
• Out-of-pocket threshold: $5,100 (a $100 increase from 2018)
• Total covered Part D spending at the out-of-pocket expense threshold for beneficiaries who are not eligible for the coverage gap discount program: $7,653.75 (a $145 increase from 2018)
• Estimated total covered Part D spending at the out-of-pocket expense threshold for beneficiaries who are eligible for the coverage gap discount program: $8,139.54 (a $278.06 decrease from 2018)
• Minimum copayments under the catastrophic coverage portion of the benefit:
  • $3.40 for generic/preferred multisource drugs (a $.05 increase from 2018)
  • $8.50 for all other drugs (a $.15 increase from 2018)

Employer plan sponsors will use these parameters to determine whether the plan’s prescription drug coverage is creditable for 2019. This information is necessary in order to provide the required disclosure to Medicare Part D-eligible individuals and also to CMS. As a reminder, the annual participant disclosure requirement can be satisfied by sending a single notice at the same time each year prior to October 15, but may also be required at other times (e.g., to newly eligible participants, upon a change in the plan’s creditable coverage status or upon request from a Medicare Part D-eligible individual).

CMS Announcement »