On April 1, 2019, CMS released the 2020 parameters for the Medicare Part D prescription drug benefit. This information is used by employers to determine whether the prescription drug coverage offered by their group coverage is creditable or non-creditable. To be creditable, the actuarial value of the coverage must equal or exceed the value-defined standard Medicare part D coverage provides.
For 2020, the defined standard Medicare Part D prescription drug benefit is:
•Deductible: $435 (a $20 increase from 2019)
•Initial coverage limit: $4,020 (a $200 increase from 2019)
•Out of pocket threshold: $ 6,350 (a $1,250 increase from 2019)
•Total covered Part D spending at the out-of-pocket expense threshold for beneficiaries not eligible for the coverage gap discount program: $9,038.75 (a $1,385 increase from 2019)
•Estimated total covered Part D spending at the out-of-pocket expense threshold for those eligible for the coverage gap discount programs: $9,719.38 (a $1,579.84 increase from 2019)
•Minimum cost-sharing under catastrophic coverage benefit: $3.60 for generic/preferred multi-source drug (a $.20 increase from 2019) and $8.95 for all other drugs (a $.45 increase from 2019)
Employers should use these 2020 parameters for the actuarial determination of whether their plans’ prescription drug coverage continues to be creditable for 2020. For additional information, please consult with your adviser.
Source: NFP BenefitsPartners