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What’s Considered Creditable Coverage For Medicare


Coverage that’s as good as Medicare is creditable coverage, meaning the plan benefits are up to the same standards as Medicare. When a person has creditable coverage, they may postpone enrollment in Medicare. Creditable coverage allows beneficiaries to delay enrolling without worrying about being late enrollment penalties.

Examples of Creditable Coverage Under Medicare

The most common type of creditable coverage is a large employer group plan. Meaning, a company that employs 20 or more people. When working for an employer, you likely receive health coverage through the company. If the company you work for has more than 20 employees, you have creditable coverage for Medicare.

Additionally, the same is true when you’re on your spouse’s large employer group health plan. An employer with small group insurance is a company with less than 20 employees and may not be creditable coverage under Medicare. Further, a variety of government programs are also considered creditable coverage. Examples of other types of coverage are individual, group, and student health plans.

What is Creditable Coverage for Medicare Part D?

Prescription plans are the most common type of creditable coverage. A plan is creditable for Part D as long as it meets four qualifications.

  1. Pays at least 60% of the prescription cost
  2. Covers both brand-name and generic medications
  3. Offers a variety of pharmacies
  4. Does not have an annual benefit cap amount, or has a low deductible

What is Creditable Coverage for Medicare Part B?

Delaying Part B enrollment is common. Creditable coverage usually comes from a current employer plan. The Part B penalty increases incrementally for every year you lack creditable coverage.

Thus, you pay the penalty cost plus your premium when you finally enroll in Part B.

The Medicare Modernization Act requires insurers, whose policies may or may not include prescription drug coverage, to notify Medicare-eligible policyholders whether their coverage is considered creditable coverage.

Entities Required to Provide Proof of Creditable Coverage for Medicare

  • Group health plans
  • Department of veterans affairs
  • Unions
  • Federal state
  • Local governments

Notice of Creditable Coverage

The Notice of Creditable Coverage works as proof of your coverage when you first become eligible for Medicare. Your Notice of Creditable Coverage comes in the mail each year for those who obtain drug coverage through an employer or union.

This notice will inform you if your current coverage is considered creditable. Make sure to keep the notice filed safely with your personal documents for easy access. It comes in the mail annually each September before the Annual Enrollment Period begins.

What Happens if You Don’t Have Creditable Coverage?

You must pay the late enrollment penalty, in addition to your premium, if you delay enrollment. Therefore, delaying beyond 63 days without creditable coverage may result in higher monthly costs.

The penalty for Part D is equal to 1% of the national base beneficiary premium times the number of months you went without creditable coverage. In addition, the Part B penalty is 10% for every year you go without coverage. Neither of the penalties ever goes away.

Examples of Coverage that is NOT Creditable Under Medicare

Is COBRA Creditable Coverage?

COBRA can be creditable for Part D, but COBRA is NOT creditable under Part B.

Is Veterans Benefits Creditable Coverage?

VA benefits are only creditable coverage under Part D. VA benefits are NOT creditable under Part A and Part B. This is something that is HIGHLY miscommunicated to veterans.

Even if you have medical coverage under the VA, there are still many reasons to enroll in Medicare coverage to work with your VA benefits.

Is TRICARE or CHAMPVA Creditable Coverage?

Whether you have CHAMPVA or TRICARE, you’ll need to enroll in both Part A and Part B of Original Medicare when you’re first eligible for Medicare to keep your CHAMPVA or TRICARE benefits as well as avoid late enrollment penalties.

Is FEHB Considered Creditable Coverage?

No, FEHB is NOT considered creditable coverage. However, some beneficiaries choose to still delay enrolling in Medicare when they have FEHB benefits. Some may find the FEHB benefits to be more cost-effective and vice versa.

I Had Proof of Creditable Coverage but Lost It, How Do I Get Another Copy?

You’ll need to contact your benefits administrator to get proof of your creditable coverage.

How to Find Out if Your Coverage is Creditable Under Medicare

Once you know which parts of Medicare you currently have creditable coverage for, you can determine what parts of Medicare you need to enroll in, or if you can delay Medicare until you lose your creditable coverage.

Medicare guidelines and regulations regarding creditable coverage can be a little intimidating. We know the lingo, and have the knowledge and resources to help you quickly navigate the Medicare maze. Whether you have creditable coverage or not, we can help. Give us a call today, or use our rate form to see all your Medicare options in one place now.

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Jagger Esch

Jagger Esch is the Medicare expert for MedicareFAQ and the founder, president, and CEO of Elite Insurance Partners and MedicareFAQ.com. Since the inception of his first company in 2012, he has been dedicated to helping those eligible for Medicare by providing them with resources to educate themselves on all their Medicare options. He is featured in many publications as well as writes regularly for other expert columns regarding Medicare.

26 thoughts on “What’s Considered Creditable Coverage For Medicare

  1. Hi Mr. Easch! I’m just totally confused about Medicare part B. My husband turned 65yrs old last month and chose to enroll to part A only. When I contacted Medicare, I was informed that if my husband’s current health insurance coverage which is APWU (Cigna/FEHB) High Option Plan is considered creditable coverage (that I thought it is), he doesn’t get penalized if he enrolls to part B at a later time. However, I read your article here that FEHB is not considered creditable coverage. If this is true, I then have to have my husband enroll to Medicare part B. Please advise. Thank you.

    1. Hi Maria – while FEHB is creditable for prescription drug coverage (Part D) under Medicare, it is not creditable for Part B. Thus, we would recommend your husband enroll in Part B as soon as possible.

  2. At what age do I have to have
    Creditable Coverage For Medicare?
    Does a high deductible plan count as creditable?

    1. Hi Ronald, once you turn 65 and become eligible, you will need to have creditable coverage for Medicare to be safe from late enrollment penalties. If your coverage is through an employer with at least 20 employees, it is considered creditable for Medicare. If the coverage is through an employer with fewer than 20 employees or through the Marketplace, it is not creditable.

  3. My question about credible insurance is at what age do you have to have credible insurance for Medicare and what would make a high deductible plan credible or not?

    1. Hi Ronald – you must have creditable health insurance coverage once you are 65 and age into Medicare eligibility. A high-deductible plan is creditable if it is through an employer with 20 or more employees.

  4. Hi!
    I am going on a 10 day caribbean cruise. I see Plan N covers 80% expenses after a $250 deductible for an emergency. Question: What qualifies as a emergency in this situation? And what are the plan limits?
    Thanks.

    1. Hi Andrea! Any emergency care at a hospital within the first 60 days will qualify. The plan lifetime limits are $50,000.

  5. So I was wondering if you could help me understand as I am so confused… I became disabled in 1993 and eligible for medicare in 1995. I didn’t take part B bc I still had coverage from my old job and then in 1996 became covered from my husbands job to which I still have today. In 1995 medicare never said ANYTHING about late enrollment penalties/fees (I have all of the paperwork and brochures they sent me) My husband will turn 65 and wants to retire … The company he works for has changed hands and group insurance plans multiple times over the past 26 yrs but we have always been covered continuously. My old company dissolved a long time ago so I can’t verify my coverage from 1995 to 1996 w them as they are no more… I can prove we had coverage from 1996 on… but will I have to pay a penalty fee for 26 years bc I can’t prove my coverage back in 1995? And when did Medicare start this late penalty fee I was never made aware of this? any help?

    1. Hi Nancy! When do you turn 65? When you age into Medicare at 65, your penalties will reset. This only happens when beneficiaries were eligible for Medicare due to a disability and delayed Part B until they aged into Medicare at 65.

  6. If I am 65, employed full time, and have not signed up for Medicare because I have employer health coverage for which I pay a premium. What happens if I lose my job for one month and so am not covered by my employer’s insurance for one month? (In this case, it would be because of a government shutdown). Will I be penalized for Part B when I retire in 2 years and sign up for it because I missed one month of coverage?

    It appears Cobra is not creditable coverage–although I don’t have the $2,000 a month to buy it anyway. So I will have one month of no insurance.

    I do not want to sign up for Part B until I retire as my employer plan is far superior to what Medicare covers. But I’m concerned about missing a month of coverage now that I am 65.

    What would the consequences be if I miss the month of July, but am fully covered otherwise for the next 2 years?

    And if I buy Part B to cover July alone, can I then drop it when my employer health insurance is reinstated–and start it up penalty free when I retire? I don’t want to pay for Part B for the next 2 years while I’m still paying for my employer health insurance.

    And….can I even pay for Part B for July at this late date–it’s June 1st. Won’t know if the government will shut down or not until midnight on June 30th.

    1. “What would the consequences be if I miss the month of July, but am fully covered otherwise for the next 2 years?” – there would be no consequences. The Part B penalty does not kick in until you’ve gone without coverage for a full 12 months.

      “And if I buy Part B to cover July alone, can I then drop it when my employer health insurance is reinstated–and start it up penalty-free when I retire?” – Yes

      “And….can I even pay for Part B for July at this late date–it’s June 1st.” – I would contact your benefits administrator and Medicare to find out your options.

  7. Hello! My husband andI are dual U.S.-Canadian citizens. When we retired we moved first to Toronto for 9 years, and recently to Vancouver. We are both 72. When we turned 65, we received cards for Medicare Part A. We have never used it, and we’ve never signed up for parts B and D, because first OHIP in Ontario, and now the BC provincial medical plan provided all the medical care and coverage we needed.
    At some point, we may want to return to the U.S. But Medicare is saying we may be penalized by 10%, then 20%, etc for each year we have not enrolled in B and D. This is absurd. Between us, we have had 4 major surgeries in Canada, at no cost to us, and at no cost to the U..S. Government. I contributed to Medicare for my entire working life, and my husband for about 25 years. Why would we then be penalized for SAVING money for the U.S. Government?

    Can you tell me if OHIP in Ontario and the BC provincial health plans are considered “credible coverage”? This I gather would exempt us from penalties. Otherwise, this would literally mean we could never again afford to live in the U.S.
    Thank you and best wishes, Lynne Thorndycraft

    1. Hy Lynne! I have searched all over trying to find an answer for you. Creditable coverage, in the way I think about it, is generally defined as coverage that is as good as or better than Medicare. As long as your OHIP had coverage for Hospital/Medical as well as drugs, I would think it would be creditable coverage. Sometimes, the employees working for Medicare are not as educated on the topic as you would expect. I would try to get proof that your coverage was as good as Medicare. Then, call Medicare back and speak to another person and let them know the coverage you had should be considered creditable.

  8. Hello. I am having trouble getting an answer from my current health insurance company as to whether my coverage is credible for Medigap purposes. It is an individual PPO policy. I have received statements from them once a year that it is credible specifically for prescription drug purposes and they have given me a statement as to my coverage dates, but I have nothing that says the health coverage is credible. Are they required to give me something in writing stating whether the health coverage is credible or not so I don’t have to worry about a 6 month waiting period for pre-existing conditions on my medigap?

    1. Hello! Thank you for your question. If your coverage is through your employer, and your employer has more than 20 employees, then the coverage should be creditable. Your employer benefits administrator would need to provide you documents showing your coverage is creditable. When you apply for Part B later, you will need to submit these documents to Medicare.

  9. I am reaching age 65 and I don’t have enough credits for social security payments, and my spouse hasn’t reached age 62 yet so he doesn’t earn social security. The social security office sent me a notice that I don’t qualify for Medicare benefits. My husband retired from the military and gets TriCare, which I also get. TriCare says I can continue with them until my husband reaches age 62. In this situation, would I face penalties for delaying Medicare Part B coverage, since I don’t qualify on my own lack of work credits, and husband is not social security eligible yet?

    1. Hello! Can you provide more detail on why you don’t qualify for Medicare benefits? Do you mean you don’t qualify for premium-free Part A? If that is the case, you’re still eligible for Medicare. You just don’t get Part A premium-free like most since you did not pay into Medicare enough quarters. If your husband worked enough quarters, you then would be eligible for premium-free Part A. Under normal circumstances, you would be required to get Part B to keep your TRICARE for Life eligibility. (When those on TRICARE turn 65, they are then eligible for TFL) In this scenario, you are not required to get Part B to keep your eligibility for TRICARE. When you turn 65, you’ll be eligible for USFHP instead of TFL. If you ever become eligible for premium-free Part A, you will no longer be eligible for USFHP. You then will be required to enroll in both Part A & Part B to keep your TRICARE eligibility and move over to TFL. Now, with that said, this does not omit you from the Part B penalty. Since USFHP is not considered creditable coverage under Part B, you will have to pay the penalty later when you do enroll since you delayed when you first aged in at 65. I would contact someone at TRICARE to confirm.

  10. I am grandfathered into the U.S. Family Health Plan, which is a specialized TRICARE Prime option. If a member before 2012 then one is not required to join Medicare Part B; however, the TRICARE website says if you move out of area or otherwise leave the plan you MAY have to pay the Part B enrollment penalty. Is this grandfathered coverage considered “creditable” coverage or not? (I understand that TRICARE itself is not.)

    1. Hi Larry! What you read on the TRICARE website is accurate. You are not required to join Part B, however, it’s still not considered creditable coverage under Medicare. If you leave the USFHP plan, you will have to pay the Part B penalty. I would contact TRICARE directly to confirm.

  11. I am considering changing my medigap policy (i have standard/original medicare + medigap) because the premiums have become nearly unaffordable for me. I have had my medicare & medigap for 10 years, continuously. I’m not clear on one thing: If I were to switch to another medigap policy offered by a different carrier, would my previous medigap coverage be considered “creditable coverage” or not? I’m certain I have conditions that would fall under the pre-existing condition category. Would the previous medigap coverage give me an exception for the 6-month pre-existing condition exclusion?

    1. Hello! Creditable coverage only applies to Part B and Part D. You can switch to another Medigap plan at any time, however, you will have to answer health questions during the enrollment process. You’re 6-month OEP only comes around once in your lifetime, which is the first 6 months you have Part B. It does not hurt to compare other plans in your area to see if you can get accepted into a plan with a lower premium though! If your pre-existing conditions get you denied, you can keep your current coverage.

  12. Your article is really helpful. I have one question. You don’t mention coverage under a national health plan from another country. My question is whether such coverage would serve as creditable coverage for addressing the 6-month waiting period for coverage of preexisting conditions under a Medigap policy.This is a lttile counterintuitive, because it raises the quetion of how someone with Medicare could simultaneously have another nation’s coverage, but I think there may be situations under which this could occur. Can you address this? Thank you.

    1. Hello! So happy you found the article helpful! National Health plans can be considered creditable coverage. It’s handled on a case by case scenario. If you had national health coverage and were penalized when you went to enroll in Medicare, CMS may not have had all the information they needed to consider it as creditable coverage. By submitting a determination request form, you may have the penalties removed. There was a similar question recently on our Part B penalty page you may find helpful. I hope this helps!

  13. Dear Sir, I have been on my husband’s insurance plan for the last nine-plus years. We have had an HSA plan with $6000 deductible. The prescription coverage kicked in when the deductible was met. Is that considered “Creditable Prescription Drug Coverage”? Many thanks, Gail Harrison

    1. Hi Gail! This depends on the plan you have. Some are considered creditable coverage under Part D, but not all. I would call your carrier, they should be able to tell you if it’s creditable coverage or not.

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