Since your organization offers an Individual Coverage Health Reimbursement Arrangement (ICHRA) through Zorro, Zorro will automatically post the Notice of Creditable Coverage in the employee portals. This notice explains how the ICHRA benefit interacts with Medicare and ensures employees understand whether their coverage meets the government’s standards for “creditable” prescription drug coverage.
While Zorro handles the distribution of this notice, as the employer you should:
Understand that ICHRA coverage is typically not considered creditable for Medicare Part D.
Encourage employees approaching or currently eligible for Medicare to review the notice carefully and contact Medicare or their benefits advisor with questions.
Reinforce awareness during open enrollment that employees transitioning to Medicare should review their options promptly to avoid potential late enrollment penalties.
Please note: Even though Zorro distributes the Notice of Creditable Coverage directly to employees, employers are still required to file a Disclosure to CMS (Centers for Medicare & Medicaid Services) each plan year confirming whether their prescription drug coverage is creditable or non-creditable.
How to file: Submit electronically using the CMS online disclosure form:
Below is the language in the notice to employees:
Important Information for Employees Who Are or May Become Eligible for Medicare
If you are currently enrolled in Medicare or will become eligible for Medicare during the plan year, please read this carefully.
Your employer is offering you an Individual Coverage Health Reimbursement Arrangement (ICHRA) through Zorro. Under an ICHRA, your employer reimburses you for health insurance that you purchase on your own, either an individual health plan through the Marketplace or a Medicare plan if you are eligible.
Because an ICHRA reimburses you for coverage that you purchase independently, it does not itself include prescription drug benefits. As a result, the ICHRA is considered non-creditable coverage for purposes of Medicare Part D (prescription drug coverage).
This means:
If you are eligible for Medicare, you may choose to use the ICHRA to reimburse your Medicare Part A, Part B, and/or Part D premiums.
However, if you do not enroll in a Medicare Part D or other creditable prescription drug plan when first eligible, and you go without creditable coverage for 63 days or more, you may be charged a late-enrollment penalty when you later enroll in Medicare drug coverage.
If you are or become eligible for Medicare, we recommend reviewing your coverage options to ensure you maintain prescription drug benefits that meet your needs and avoid any potential penalties.