CMS proposes a fix for simplified creditable coverage

Remember the confusion surrounding the Simplified Determination of Creditable Coverage for Part D last year?

Centers for Medicare & Medicaid Services (CMS) has proposed a fix.

On January 10, 2025, CMS released the Draft CY 2026 Part D Redesign Program Instructions—and it could have a big impact on creditable coverage determinations. (Read the proposal here: https://lnkd.in/eswK6waB)

Here’s what’s changing for the simplified method:

• The coverage standard is increasing from 60% to 72% of participants’ prescription drug expenses (thanks to the Inflation Reduction Act).
• The new method now includes both brand-name, generic, and biological drugs.
• Outdated references to annual/lifetime max benefits and deductibles are being removed.

Why does this matter?

Many plan sponsors struggled last year with determining whether their coverage was still creditable.

If this 72% standard is finalized, plans may need to restructure benefits to maintain compliance. If not, Medicare-eligible participants could face late enrollment penalties.

What’s next?

CMS wants feedback—especially from plan sponsors who rely on the simplified method—by February 10, 2025

If your organization provides group health plans to Medicare-eligible individuals, now’s the time to evaluate your plan strategy for 2026.