The Centers for Medicare & Medicaid Services (CMS) has released the updated Medicare Part D benefit parameters for 2026. Each year, employers that sponsor a plan providing or reimbursing prescription drugs, whether for active employees, COBRA participants, or retirees, must notify individuals whether their coverage is creditable or non-creditable compared to Medicare Part D. This determination hinges on whether the plan is expected to pay, on average, as much as, or more than, Medicare Part D.
What’s Changing in 2026?
CMS’s announcement and two fact sheets (2026 Medicare Advantage and Part D Rate Announcement and the Final CY 2026 Part D Redesign Program Instructions) lay out the updates for 2026, including the following:
- Part D deductible increasing from $590 to $615
- Part D out-of-pocket maximum increasing from $2,000 to $2,100
- Revised simplified determination methodology*, including new requirement to cover biologics, elimination of the deductible test, and updated expected claims coverage threshold: Increasing from 60% to 72%, aligning with improvements under the Inflation Reduction Act
How BSI Supports Compliance
BSI helps employers interpret CMS updates and apply them in real-time to plan design and compliance processes. Here’s how BSI supports Medicare Part D management:
- Assessing Creditability: BSI coordinates with carriers or Pharmacy Benefit Managers (PBMs) to determine whether prescription drug coverage is creditable under current CMS rules.
- Advising on Plan Design: BSI helps ensure an employer’s prescription drug plan aligns with the latest creditability standards, such as the new 72% claims coverage threshold and biologics coverage.
- Ensuring Timely Disclosure: BSI helps employers meet annual CMS notice requirements by tracking deadlines and preparing appropriate communication to employees and eligible beneficiaries.
- Strategic Planning: With the current simplified methodology set to sunset in 2027, BSI helps employers start planning now for the upcoming shift in creditable coverage requirements.
Bottom Line for Employers
With the 2026 Part D parameters and revised simplified determination methodology now available, employers should assess whether their current prescription drug plans meet creditable coverage standards. BSI is your first line of support in evaluating compliance and planning for future regulatory changes.
If your plan doesn’t yet meet the 72% threshold, now is the time to start strategizing for 2027, when the current 60% simplified determination methodology is expected to be retired.
*View the new methodology here.