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What’s Considered Creditable Coverage For Medicare


Coverage that’s as good as Medicare is considered creditable coverage, meaning the plan benefits are as good as Medicare. When a person has creditable coverage, they may postpone enrollment in Medicare. Creditable coverage allows beneficiaries to delay without worrying about being penalized and forced to pay a later enrollment penalty.

Examples of Creditable Coverage Under Medicare

The most common type of creditable coverage is a large employer group plan. Meaning, a company employs 20+ 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.

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. Small group plans may not be considered creditable coverage under Medicare.

A variety of government programs are also considered creditable coverage. Other plan types are individual, group, and student health plans.

What is Creditable Coverage for Medicare Part D?

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

  1. Creditable Part D must pay at least 60% of the prescription cost
  2. Must cover both brand-name and generic medications
  3. Plans must offer a variety of pharmacies
  4. Must not have an annual benefit cap amount, or it must have 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 is 10% every year that you don’t have creditable coverage. Then 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 that you obtained coverage elsewhere when you first became 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. Keeping this notice in a safe place is a good idea. 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?

Delaying past 63 days without creditable coverage may result in higher monthly costs. You must pay the late-enrollment fee. The penalty for Part D is equal to 1% of the “national base beneficiary premium.” Take that number times the number of months you went without creditable coverage. The total is your late penalty cost. 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 Considered Creditable Coverage?

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

Is Veterans Benefits Considered Creditable Coverage?

VA benefits are only considered creditable coverage under Part D. VA benefits are NOT considered 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 Considered 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 would 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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Lindsay Engle

Lindsay Engle is the Medicare expert for MedicareFAQ. She has been working in the Medicare industry since 2017. She is featured in many publications as well as writes regularly for other expert columns regarding Medicare. You can also find her over on our Medicare Channel on YouTube as well as contributing to our Medicare Community on Facebook.

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

  1. 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. 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.

  3. 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.

  4. 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.)

  5. 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.

  6. 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!

  7. 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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