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What Is Creditable Coverage for Medicare


For Medicare to consider a health plan to be creditable coverage, it must provide benefits at least as good as those Medicare provides. When a person has creditable coverage, they may delay enrollment in Medicare without accruing penalties. Below, we review common forms of coverage and discuss their creditability for Medicare.

Examples of Creditable Coverage Under Medicare

If you are approaching Medicare eligibility and wish to delay your Medicare Part B without penalty, you must have creditable coverage. Some of the most common types of creditable coverage are:

If your employer or union covers more than 20 people, your health plan is creditable coverage for Medicare. Additionally, the same is true when you are on your spouse’s union or large group health plan. Thus, you will have creditable coverage for Medicare as well.

What is Creditable Coverage for Medicare Part D?

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

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

If you are eligible for Medicare Part D but delay enrollment, you accrue a penalty for each month you are eligible but do not enroll. This penalty will be assessed when you enroll in the future and you will need to pay it, in addition to your premium, each month you have Medicare Part D.

What is Creditable Coverage for Medicare Part B?

It is common to delay Medicare Part B enrollment due to creditable coverage. However, delaying Medicare Part B without creditable coverage has a different result. Once eligible for Medicare, if you do not enroll in Medicare Part B, the Medicare Part B penalty increases incrementally for every year you lack this coverage.

Thus, you pay the penalty cost plus your premium each month once you finally enroll in Medicare 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 creditable for Medicare.

Entities Required to Provide Proof of Creditable Coverage for Medicare

  • Group health plans
  • Department of Veterans Affairs (VA)
  • Unions
  • Federal, state, and local governments

Notice of Creditable Coverage

The Notice of Creditable Coverage works as proof of your coverage when you first become eligible for Medicare. Those who have creditable coverage through an employer or union receive a Notice of Creditable Coverage in the mail each year.

This notice informs you that your current coverage is creditable. 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.

It is essential to keep track of this notice, as it will be required when enrolling in Medicare Part B after your Initial Enrollment Period. However, if you misplace the notice, you can obtain a new copy through your benefits administrator.

What Happens if You Do Not Have Creditable Coverage?

If you delay Medicare enrollment without credible coverage, you must pay a late enrollment penalty in addition to your premium. Therefore, delaying beyond 63 days without creditable coverage may result in higher monthly costs.

The penalty for Medicare Part D is 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 12-month period you go without coverage. Neither of the penalties ever go away. Hence the importance of understanding your coverage type to avoid penalties.

Many employees are under the impression that their group health plan through work will allow them to delay enrollment in Medicare until they retire. Yet, if you work for an employer with fewer than 20 employees, your group health insurance will not be creditable for Medicare.

Don’t be like Bob, who assumed his health plan with his small company would cover him until retirement at 70. Now, he is responsible for paying the Medicare Part B penalty indefinitely.

Examples of Coverage that is NOT Creditable Under Medicare

  • TRICARE
  • Veterans Benefits
  • COBRA
  • CHAMPVA
  • Retiree plans

When is COBRA Creditable for Medicare?

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

Is Veterans Benefits Creditable Coverage?

VA benefits are only creditable coverage under Medicare Part D. VA benefits are NOT creditable under Medicare Part A and Part B. This is something that is very often 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 will need to enroll in Medicare Part A and Part B when you are first eligible for Medicare to keep your CHAMPVA or TRICARE benefits and avoid late enrollment penalties.

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 the parts of Medicare in which you'll need to enroll. Otherwise, you may not be able to delay Medicare without penalties.

Medicare guidelines and regulations regarding creditable coverage can be a little intimidating. At MedicareFAQ, we're fluent in the terminology 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.

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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.

50 thoughts on “What Is Creditable Coverage for Medicare

  1. Your article was very helpful. My wife is currently on medicare part A, B and has a supplement G and D. She just got a full time job at the local library system which has less than 20 employees but the health insurance is with the State of Georgia Health Plan (Blue cross/BS, plan for all State employees and teachers) It sounds like her employer plan would be creditable even though her employer is less than 20. What do you think? Thanks for your input.

    1. Thank you, Bill. I’m happy you found the article helpful. Since the insurance coverage is through the State of Georgia, it does seem like that would be creditable coverage even though her specific library branch has less than 20 employees. To verify this, your wife can contact her benefits administrator or Medicare directly.

  2. How would I prove creditable coverage if I have a German private insurance (we pay and get reimbursed) – they don’t have their policy in English, and they don’t have an office in the US, but they are better than anything we can get in the US (no “network only”, no copays,…….)

    1. In this special circumstance, I would recommend contacting your local Social Security office and ask what they would require to prove this coverage creditable.

  3. This article says that retiree plans are not considered creditable coverage for Medicare Part B. I am a federal retiree and I carried my Blue Cross/Blue Shield basic coverage into retirement. It was my understanding that this coverage for federal annuitants was consider creditable coverage for Part B. Is that true?

    1. Tim, Federal Employee Health Benefits are only considered credible while you are still working. Once you are no longer working for the company providing the benefits, you must enroll in Medicare Part B to avoid the penalty. However, you can keep your FEHB after enrolling in Medicare Part B and use it as secondary coverage.

  4. Wondering

    I am 68 years old and retired at 65. I started on my spouses group coverage the day after I retired with an employer over 20 people. He is going part time in April when I turn 69. As a result his premiums will skyrocket while his income drops.. We want to drop me from the group plan and start my Part B
    to save money. I have Part A already. Does this qualify me for SEP? Or does voluntary dropping group coverage set me up for using the GEP and lifetime penalties?

    1. Roberta, leaving group coverage voluntarily does qualify as an SEP in certain states, if this applies to your state you would avoid any part B penalties.

  5. Good evening; I have received conflicting information from both social security and medicare, but I believe medicare is correct.
    The question is this: I am a full time PhD student at a state university and have purchased student health insurance coverage. It is a very high end plan and I called the insurance company and they confirmed it was credible coverage. I will be 65 in February. Medicare rep says I can defer signing up for Part B without penalty because I have credible coverage but Social Security said only people with a large employer who carry health care coverage can defer without penalty.
    It seems Social security’s response is completely illogical. The coverage I have with the student plan is far superior to what I would get from Part B. Further I have signed up for coverage for the academic year. Please advise.
    Thank you

    1. Rosemary, in most cases, if your coverage is as good as or better than Medicare, it would be considered creditable. It would be beneficial to reach out to your current plan to ensure you can remain on the plan after age 65. However, Social Security does administer Medicare fines, so I would follow their guidance in this situation.

  6. I retired from a city fire department in 2016 at age 51. I receive a standard pension and insurance coverage through the city. I was awarded SSDI in 2021 at age 56 (not due to the fire department) and became eligible for Medicare Part A and B. The pension’s pharmacy insurance is considered creditable for Medicare Part D. They send a notice each year. Does this mean that the regular insurance coverage is also creditable? Do I have to take Medicare Part B or can I wait until age 65 with no penalty? Some say I can wait with no penalty, others say I will have to pay a penalty. Who is correct?

    1. Thanks for reaching out! Just because your pharmacy coverage is credible, does not mean your health coverage is credible as well. If you do not receive a notice of credible coverage each year, I would contact your benefits administrator for further details. Often with a pension, you must take Medicare at age 65, however every plan has different requirements.

  7. Dear Sir,
    I will be turning 65 in June and still plan on working and staying on company insurance. I was told that I can defer Medicare without a penalty due to having credible coverage. Is this correct ? How do I know if I have credible coverage? Is there a list?

    1. Hi Barbara – if the company that you receive insurance through has at least 20 employees, you can defer Medicare without penalty.

  8. 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.

      1. Hi Jagger,

        This is very interesting. Is there anything documented on the Medicare web site about a penalty for remaining on small group coverage because it is not creditable for Part B? I am Medicare eligible and working for a group with fewer than 20 employees (or at least we will have fewer than 20 employees soon). Thank you!

        Janet Walker

  9. 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.

      1. My husband retired with lifetime healthcare and prescription coverage from his employment in the Buffalo Police department. I am entitled to healthcare and drug coverage from his employer while he is alive. If he dies my coverage ends. A agent from Medicare stated he has credible coverage. Do I need to enroll in Medicare B & D now or can I enroll later without penalty if he should pass away before me. In other words do I have credible coverage and can I decline Medicare coverage B & D without penalty later if he should pass away before me. I enrolled in Medicare B prior to knowing about credible coverages, so can I know decline until a future date now and enroll later if need be.
        Thank you for your time,
        Sonia DiPasquale

      2. Hi Sonia – if Medicare confirmed that the coverage is creditable for Part B and Part D, you can delay enrollment until it becomes necessary. In the event that your husband would predecease you, you would get a Special Enrollment Period due to loss of coverage. For Part B, you’ll need to go through Social Security and fill out Form CMS-1763 to terminate your medical (Part B) insurance. During the Annual Enrollment Period, which is going on now (10/15-12/7), you have the chance to drop your Part D coverage.

  10. Hello, my husband and I retired at age 60, we went on cobra for 18 mos and then purchased insurance on the ‘exchange’ – it is very costly. If we drop this insurance, will we experience any issues getting medicare at age 65? i.e. creditable coverage?

    1. Hi Debra, thank you for reaching out. You will not experience any issues when enrolling in Medicare at age 65 if you drop your current plan. At age 65 you receive an Open Enrollment, you can think of this as a blank slate.

  11. If I am still working and I am 65 and have credible coverage , do I have to sign up for Part A during the IEP?

    1. Bernadette, you are not required to enroll in Part A, however if you are eligible for premium-free part A it is recommended to enroll when you first become eligible.

      1. an extension of Bernadett’s question. i am under 65 and on ssdi. i was told i had to accept part a when eligible now or else lose my ssdi. is this true/

      2. Yes. If you are on SSDI and do not accept Medicare Part A when you become eligible, you will lose your SSDI benefits.

  12. 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.

  13. 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.

    2. We were never informed of a “penalty” either. My husband had a bad back injury, crushing several vertabrae and had to go out on disability. Our Medicare monthly payment is going up around $20 more in 2022. He has been on a State assisted pharmacy plan, so I guess he shouldn’t have to pay a penalty? Is Medicare trying to push seniors who’ve paid into the system their whole lives, in a debt situation? If you have a permanent disability, and now cancer, can’t Medicare be compassionate toward seniors?

  14. 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.

  15. 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.

    2. I agree with you Lynne. Medicare penalizing folks over 65 is absurd if they had some form of coverage or medication coverage. Another thing that is ridiculous with the US health care system, is Medicare Supplements or Medicare Advantage Plans being able to discriminate over Pre-existing conditions. The ACA doesn’t allow that, so why can Medicare or third party suppliers? Americans are protected under the Supreme Court Ruling for the ACA, yet 65 and older can’t get plans on the open market and they can also be discriminated against. Agree, absurd! Take care.

  16. 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.

  17. 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.

  18. 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.

  19. 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.

  20. 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!

  21. 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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