The federal government has announced several new updates to the Medicare Part D creditable coverage determination that employers must make annually. These changes are being implemented in large part as a result of the Inflation Reduction Act.

- The deductible for Medicare Part D plans has increased to $615 (up from $590). The out-of-pocket maximum for Medicare Part D plans has been increased to $2100 (up from $2000).

- These are standard increases to reflect inflation.

- Any payments made by a plan participant once the cap is reached will have 0 copay.

- Medicare Part D includes revised liability in the wake of the Medicare Drug Price Negotiation Program. However, there is no requirement from the CMS that employer group health plans offer any special discounts for drugs appearing in the Medicare Drug Price Negotiation Program.

- Non-retiree drug plans may use either the old simplified method or the new simplified method when determining creditable coverage. Beginning in 2027, plans will only be able to use the new simplified method:

- The old simplified method requires a plan to be designed to pay a percentage of a participant’s drug expenses for that calendar year. For 2026, it is 60%.

- The new simplified method requires a plan to be designed to pay a percentage of a participant’s drug expenses for that calendar year. For 2026, it is 72%. The plan must also provide reasonable access to brand name and generic prescription drugs.

Employers should familiarize themselves with the new Medicare Part D Creditable Coverage requirements as soon as possible.