Each year, Medicare Part D requires group health plan sponsors to disclose to individuals who are eligible for Medicare Part D and to the Centers for Medicare and Medicaid Services (CMS) whether the health plan’s prescription drug coverage is creditable. Medicare Part D open enrollment for the 2027 plan year begins on Oct. 15, 2026, and ends on Dec. 7, 2026. Plan sponsors must provide the annual disclosure notice to Medicare-eligible individuals before Oct. 15, 2026 - the start date of the annual enrollment period for Medicare Part D. CMS has provided model disclosure notices for employers to use. This notice is important because Medicare beneficiaries who are not covered by creditable prescription drug coverage and do not enroll in Medicare Part D when first eligible will likely pay higher premiums if they enroll at a later date. Although there are no specific penalties associated with this notice requirement, failing to provide the notice may be detrimental to employees. Action Steps Employers should confirm whether their health plans’ prescription drug coverage is creditable or non-creditable and prepare to send their Medicare Part D disclosure notices before Oct. 15, 2025. To make the process easier, employers often include Medicare Part D notices in open enrollment packets they send out prior to Oct. 15. Creditable Coverage A group health plan’s prescription drug coverage is considered creditable if its actuarial value equals or exceeds the actuarial value of standard Medicare Part D prescription drug coverage. In general, this actuarial determination measures whether the expected amount of paid claims under the group health plan’s prescription drug coverage is at least as much as the expected amount of paid claims under the Medicare Part D prescription drug benefit. For plans that have multiple benefit options (for example, PPO, HDHP and HMO), the creditable coverage test must be applied separately for each benefit option. Model Notices CMS has provided two model notices for employers to use: A Model Creditable Coverage Disclosure Notice for when the health plan’s prescription drug coverage is creditable; and A Model Non-creditable Coverage Disclosure Notice for when the health plan’s prescription drug coverage is not creditable. These model notices are also available in Spanish on CMS’ website. Employers are not required to use the model notices from CMS. However, if the model language is not used, a plan sponsor’s notices must include certain information, including a disclosure about whether the plan’s coverage is creditable and explanations of the meaning of creditable coverage and why creditable coverage is important. Notice Recipients The creditable coverage disclosure notice must be provided to Medicare Part D - eligible individuals who are covered by, or who apply for, the health plan’s prescription drug coverage. An individual is eligible for Medicare Part D if they: Are entitled to Medicare Part A or are enrolled in Medicare Part B; and Live in the service area of a Medicare Part D plan. In general, an individual becomes entitled to Medicare Part A when they actually have Part A coverage, and not simply when they are first eligible. Medicare Part D-eligible individuals may include active employees, disabled employees, COBRA participants and retirees, as well as their covered spouses and dependents. As a practical matter, group health plan sponsors often provide the creditable coverage disclosure notices to all plan participants. Timing of Notices At a minimum, creditable coverage disclosure notices must be provided at the following times: Prior to the Medicare Part D annual coordinated election period—beginning Oct. 15 through Dec. 7 of each year Prior to an individual’s initial enrollment period for Part D Prior to the effective date of coverage for any Medicare-eligible individual who joins the plan Whenever prescription drug coverage ends or changes so that it is no longer creditable or becomes creditable Upon a beneficiary’s request If the creditable coverage disclosure notice is provided to all plan participants annually before Oct. 15 of each year, items (1) and (2) above will be satisfied. “Prior to,” as used above, means the individual must have been provided with the notice within the past 12 months. In addition to providing the notice each year before Oct. 15, plan sponsors should consider including the notice in plan enrollment materials for new hires. Method of Delivering Notices Plan sponsors have flexibility in how they must provide their creditable coverage disclosure notices. The disclosure notices can be provided separately, or if certain conditions are met, they can be provided with other plan participant materials, like annual open enrollment materials. The notices can also be sent electronically in some instances. As a general rule, a single disclosure notice may be provided to the covered Medicare beneficiary and all of his or her Medicare Part D-eligible dependents covered under the same plan. However, if it is known that any spouse or dependent who is eligible for Medicare Part D lives at a different address than where the participant materials were mailed, a separate notice must be provided to the Medicare-eligible spouse or dependent residing at a different address. Electronic Delivery Creditable coverage disclosure notices may be sent electronically under certain circumstances. CMS has issued guidance indicating that health plan sponsors may use the electronic disclosure standards under Department of Labor (DOL) regulations in order to send the creditable coverage disclosure notices electronically. According to CMS, these regulations allow a plan sponsor to provide a creditable coverage disclosure notice electronically to plan participants who have the ability to access electronic documents at their regular place of work, if they have access to the sponsor's electronic information system on a daily basis as part of their work duties. The DOL’s regulations for electronic delivery require that: The plan administrator uses appropriate and reasonable means to ensure that the system for furnishing documents results in actual receipt of transmitted information; Notice is provided to each recipient, at the time the electronic document is furnished, of the significance of the document; and A paper version of the document is available on request. Also, if a plan sponsor uses electronic delivery, the sponsor must inform the plan participant that they are responsible for providing a copy of the electronic disclosure to their Medicare-eligible dependents covered under the group health plan. In addition, the guidance from CMS indicates that a plan sponsor may provide a disclosure notice electronically to retirees if the Medicare-eligible individual has indicated to the sponsor that they have adequate access to electronic information. According to CMS, before individuals agree to receive their information via electronic means, they must be informed of their right to obtain a paper version, how to withdraw their consent and update address information, and any hardware or software requirements to access and retain the creditable coverage disclosure notice. If the individual consents to an electronic transfer of the notice, a valid email address must be provided to the plan sponsor and the consent from the individual must be submitted electronically to the plan sponsor. According to CMS, this ensures the individual’s ability to access the information and that the system for furnishing these documents results in actual receipt. In addition to having the disclosure notice sent to the individual’s email address, the notice (except for personalized notices) must be posted on the plan sponsor’s website, if applicable, with a link on the sponsor’s homepage to the disclosure notice. Disclosure to CMS Plan sponsors are also required to disclose to CMS whether their prescription drug coverage is creditable. The disclosure must be made to CMS on an annual basis, or upon any change that affects whether the coverage is creditable. At a minimum, the CMS creditable coverage disclosure notice must be provided at the following times: Within 60 days after the beginning date of the plan year for which the entity is providing the form; Within 30 days after the termination of the prescription drug plan; and Within 30 days after any change in the creditable coverage status of the prescription drug plan. Plan sponsors are required to provide the disclosure notice to CMS through completion of the disclosure form on the CMS Creditable Coverage Disclosure webpage. This is the sole method for compliance with the CMS disclosure requirement, unless a specific exception applies.

Provided by our partners at LumeLight. The One Big Beautiful Bill Act (OBBBA) created a new employer-sponsored benefit opportunity through Internal Revenue Code §128. Employers may now make tax-favored contributions of up to $2,500 annually to the Trump Account of an employee or an employee's dependent through a Trump Account Contribution Program (TACP). For employers seeking family-focused benefits, TACPs provide a way to help employees save for a child's future while receiving favorable federal income tax treatment. Proposed regulations issued in August 2026 provide the initial administrative framework and may be relied upon immediately, even before final regulations are published. Trump Accounts Trump Accounts are a type of IRA designed to help families save for a child's future. Accounts generally may be established for children under age 18 with a valid Social Security number. During the account's growth period, contributions are subject to special rules, annual limits, and investment restrictions. The growth period generally ends on December 31 of the year the beneficiary turns 17, after which traditional IRA rules generally apply. In general, contributions made during the growth period from sources such as employers, parents, children, or other individuals are subject to an aggregate annual contribution limit of $5,000 for 2026 and 2027, indexed thereafter. Certain contributions, including federal pilot contributions, qualified general contributions, and qualified rollover contributions, are not counted toward that limit. Children born between January 1, 2025, and December 31, 2028, may also qualify for a one-time federal pilot contribution of $1,000. Trump Account Contribution Programs (TACPs) A TACP is an employer-sponsored program established under Internal Revenue Code §128 that permits employers to make tax-favored contributions to the Trump Account of an employee or an employee’s dependent. A TACP must be established through a separate written plan maintained for the exclusive benefit of employees and must satisfy specified requirements relating to eligibility, contributions and benefits, employee notification, reporting, and nondiscrimination. Under the proposed regulations, a TACP may also be coordinated with a §125 cafeteria plan to permit employees to fund contributions through salary reduction on a tax-favored basis. However, salary reduction contributions may only be made to a dependent’s Trump Account, not to an employee’s own Trump Account. TACP Contributions TACP contributions may be made only to the Trump Account of an employee or an employee's dependent (as defined under §152) while the account beneficiary remains in the account's growth period, which generally ends on December 31 of the year the beneficiary turns 17. For purposes of §128, eligibility is limited to common-law employees. As a result, self-employed individuals, including sole proprietors, partners, and 2% S corporation shareholders, cannot participate in a TACP, but they can sponsor a TACP for their employees. Qualifying employer contributions are excluded from an employee's gross income up to $2,500 annually for 2026 and 2027, with the limit indexed thereafter. However, unlike many employer-provided benefits, the contributions remain subject to FICA, FUTA, and RRTA taxes. The exclusion applies on a per-employee basis rather than per Trump Account or dependent. Contributions from multiple employers are aggregated when determining the annual limit. Although an employer may divide contributions among the Trump Accounts of multiple dependents, the total amount attributable to a single employee remains subject to the annual exclusion cap. Plan Documentation A TACP must be established and maintained under a separate written plan. The document should describe the plan year, eligibility, contributions, whether salary reductions through a cafeteria plan are permitted, Trump Account designation procedures, employee certifications, notice and reporting obligations, and correction procedures. Employers must operate the program consistently with the written terms to preserve §128 tax-favored treatment. §125 Integration Employers may integrate a TACP with a §125 cafeteria plan, allowing employees to fund contributions to a dependent's Trump Account through salary reduction. Salary reduction contributions to an employee's own Trump Account are not permitted. The combination of employer contributions, if any, and employee salary reductions cannot exceed the §128 contribution limits (e.g., $2,500 for 2026 and 2027). A cafeteria plan offering this benefit must be amended to include and describe the TACP offering. In regard to employee elections, unlike many cafeteria plan benefits, TACP elections may generally be made, changed, or revoked prospectively throughout the year, provided changes become effective before the related compensation is currently available, similar to the flexibility generally available for HSA elections. Administrative Requirements Employee Notice A TACP must provide reasonable notification of the program's availability and terms to all eligible employees, so they have a meaningful opportunity to participate and understand the basic rules governing eligibility, elections, and contributions. The proposed regulations do not prescribe a specific format or delivery method. Annual Reporting Employers must furnish each participating employee with an annual written statement showing the amount of §128 contributions made with respect to the employee during the preceding calendar year. The annual statement requirement may be satisfied through Form W-2 reporting in accordance with IRS instructions. For 2026 reporting, §128 contributions should be reported in Box 12 using Code TA. Trustee Selection Not Permitted The proposed regulations prohibit employers from limiting TACP contributions to Trump Accounts maintained by selected trustees or financial institutions. Because only one Trump Account may exist for a beneficiary, employers must permit contributions to any valid Trump Account designated by an eligible employee. Verification and Correction Employers generally may rely on specified written employee certifications unless they have actual knowledge that the information is incorrect. The certification may be provided on paper or electronically and must include representations that: the beneficiary is or will be the employee’s dependent for the applicable taxable year; the beneficiary’s date of birth; and the employee knows of no facts that would make the beneficiary ineligible to receive the contribution. Employee certification alone, however, is not sufficient to establish that the receiving account is a valid Trump Account. Employers must use reasonable verification procedures, directly or through vendors, payroll providers, or trustees. In addition, when an employer transmits a qualifying contribution to a trustee, the employer must affirmatively identify the amount in writing as a §128 contribution. If an employer later determines that an amount previously treated as a §128 contribution was ineligible, the employer must notify the trustee and provide corrective information. The proposed regulations include a 21-day safe harbor for providing corrective notice after the employer identifies the error. Nondiscrimination Requirements Because of the favorable tax treatment, TACPs are subject to nondiscrimination testing modeled after the rules applicable to §129 dependent care assistance program (DCAPs). A TACP must satisfy three tests: (i) the eligibility test; (ii) the contributions and benefits test; and (iii) the 55% average benefits test. Unlike a DCAP, a TACP has no separate owner concentration test because self-employed individuals cannot participate. The nondiscrimination rules prohibit plans from favoring highly compensated employees (HCEs). For 2026 testing purposes, HCEs generally include certain owners and employees who earned at least $160,000 during 2025. A nondiscrimination failure generally affects the tax treatment of HCEs rather than causing the entire arrangement to lose TACP status. Related employers that constitute a controlled group or affiliated service group are treated as a single employer for purposes of these testing requirements. Special Safe Harbor for Employer Pilot Matches The proposed regulations include a safe harbor for employers that want to match the federal government's $1,000 pilot contribution for eligible children born from 2025 through 2028. If a qualifying pilot-match contribution is made available on the same terms and conditions to all non-excluded employees with qualifying dependents, the matching contributions are disregarded for the contributions and benefits test and the 55% average benefits test, but not for the eligibility test. Effective Date and Reliance Although the regulations would apply prospectively to plan years beginning on or after publication of final regulations, the IRS expressly permits taxpayers to rely on the proposed regulations before finalization. Employers therefore have a framework for implementing TACPs while final guidance remains pending.

Karen Young serves as President of the Bay Family of Companies, a construction organization focused predominantly on insulation, including mechanical and metal building insulation, with more than 80 locations coast to coast and into Canada. In a recent conversation, she shared how a decades-long partnership with Cottingham & Butler has shaped the way Bay approaches risk and benefits. Four Decades of Partnership Bay has worked with C&B for more than 40 years. Karen, who joined the team in 2019, credits the expertise and accessibility of the C&B team as an integral part of the relationship. They stay responsive, build relationships across Bay's people, and continually bring ideas and best practices that help the company think more strategically about its business and risk as a whole. Measurable Results on the Benefits Side That guidance has produced measurable results. In 2023, Bay moved to Med One on a recommendation from C&B and saved at least around $650,000 over the course of a couple of years. Karen noted that transitions of that size come with pain points, and the C&B team helped navigate those conversations with employees to make the change successful. Finding Stability Through a Captive Bay was also an early adopter of the Guide Re captive on the benefits side. After managing the volatility of stop loss rates and premiums in the traditional market, the captive brought greater stability. It streamlines stop loss premiums and gives Bay insight into what other partners are doing across a membership that spans industries, including distribution, manufacturing, and trucking. More Holistic Than Buying Insurance For Karen, the captive is more holistic than going to market and buying insurance. It brings together operations, safety, and the financial side, and it holds members accountable to one another. Bay still quotes the market occasionally, but its most recent review confirmed the captive remained the better route. Advice for Others Considering a Captive Her advice for anyone considering a captive: they can feel scary at first, but trust the process and develop the relationships with your brokers. For Bay, that trust has become a success story. Contact our Stop Loss Captive Experts Today!

We are excited to extend an invitation to our upcoming Employee Benefits Seminar Tour designed specifically for individuals like you, who are at the forefront of shaping organizational culture and strategy. Cottingham & Butler hosts these exclusive events to provide a free opportunity for HR professionals to network, stay on top of emerging trends, and be a strategic leader in their organization. MULTI-DATE EVENT Better Every Day Seminar Tour April - August, 2026 Dallas, TX | Pewaukee, WI | Minneapolis, MN | Des Moines, IA Oak Brook, IL | Coralville, IA | Green Bay, WI Pick Your Date! Last year over 600 HR, finance, and executive leaders attended our seminars to address the most pressing workplace challenges. This year's seminars will deliver the leadership strategies and benefit insights you need for 2026. The day will start with a powerful keynote from our partners at BecomeMore Group on Authentic Leadership, followed by three Power Talks on employees basic finance as a valuable benefit, addressing misaligned incentives in healthcare costs, and exploring weight loss and wellbeing strategies. We'll wrap up the seminar with a session on personal productivity and why being busy doesn't always mean getting things done. Throughout the day, you'll network with industry peers, enjoy breakfast and lunch, and earn valuable HRCI and SHRM recertification credits. Register today to secure your spot at our exclusive seminar where industry experts will share proven strategies for the critical challenges you're facing. “The content and the information is great and I walk away with ideas to bring back to help enhance our benefits packages and compensation.” - COTTINGHAM & BUTLER SEMINAR ATTENDEE Seminar Tour Coming to a City Near You! Interested in Sponsoring a Seminar? Our events offer unmatched networking opportunities and exposure to the latest trends in employee benefits. These signature events feature keynote speakers, hot benefit topics, and exclusive networking opportunities. We experienced over 600+ attendees at our events last year. Sponsor an event to attend and elevate your brand visibility in the benefits space. SPONSORSHIP OPPORTUNITIES

Healthcare costs are one of the largest and fastest-growing business expenses that many feel they have little control over. This webinar series offers a comprehensive exploration of self-funding strategies for employers to provide cost-effective healthcare options. WEBINAR SERIES COMPLETE THE FORM BELOW TO REGISTER FOR ALL UPCOMING SESSIONS Self-Insurance Simplified Explore self-funding strategies for cost-effective healthcare options. Employee benefit costs are up 5.6% from 2022. Healthcare costs are one of the largest and fastest-growing business expenses and one that many feel they have very little control over. This webinar series comprehensively explores self-funding strategies for employers to provide cost-effective healthcare options. Don’t miss out! Explore the sessions below and register today! On-Demand Upcoming ON-DEMAND Self-Insurance Simplified – Why Your Fully Insured Renewal Might Cost You More Long Term WATCH NOW ON-DEMAND Self-Insurance Simplified - Self-Funding 101 WATCH NOW ON-DEMAND Self-Insurance Simplified - Strategies for Reducing Claims Spend WATCH NOW ON-DEMAND Captive Advantage 101 WATCH NOW ON-DEMAND GuideRe Advantage WATCH NOW AUGUST 13th | 10:00 AM - 11:00 AM Steps to Joining Guide Re Interested in joining? For our final webinar we will provide a timeline and high-level overview of the process of being reviewed for the captive and joining. Employee Benefits Insight & Impact Trump Account Contribution Programs For employers seeking family-focused benefits, TACPs provide a way to help employees save for a child's future while receiving favorable federal income tax treatment. Employee Benefits A 40-Year Partnership Built on Strategy: Bay Family of Companies and Cottingham & Butler Karen Young shares how a decades-long partnership with Cottingham & Butler has shaped the way Bay approaches risk and benefits. Case Studies Compliance Webinars – On-Demand Library Our 2026 Compliance On-Demand Series is designed to keep you informed, prepared, and confident heading into every quarter. News VIEW MORE BenefitWave Connect with a C&B Representative Today!

We help clients lower their total cost of risk by challenging the status quo, solving complex business problems and delivering creative insurance solutions. Our technical expertise and proprietary programs, combined with our commitment to client service is the foundation of the value we bring to our clients every day. WEBINAR September 15, 2026 Securing the Scene: Best Practices After a Collision Register Now! Register Now! IN-PERSON September 15-18, 2026 NATMI Training & Certification Register Now! Register Now! WEBINAR SERIES September 24, 2026 Open Enrollment – Renewal Checklist Register Now! Register Now! PRIVATE DINNER October 5, 2026 Acres Captive Connections Dinner Learn More! Learn More! SAFETY TRAINING October 14, 2026 FMCSA 101: A Practical Introduction to FMCSA Compliance Register Now! Register Now! WEBINAR October 22, 2026 COBRA Basics & State Continuation Register Now! Register Now! WEBINAR October 22, 2026 The Impact of Drugs & Alcohol in Trucking Register Now! Register Now! IN-PERSON October 25, 2026 International Risk Management Institute Conference Happy Hour Register Now! Register Now! WEBINAR November 19, 2026 Mid-Year Election Changes Register Now! Register Now! WEBINAR December 16, 2026 OSHA Recordkeeping & ITA Compliance Register Now! Register Now! WEBINAR December 17, 2026 End of Year Wrap-Up & Looking Forward to 2027 Register Now! Register Now!