This news pertains to Employers and Medicare Part D recipients:

Employers are required to send a Notice of Creditable Coverage to all employees who qualify for Medicare prior to October 15, 2022.

All entities that provide healthcare coverage to a Medicare beneficiary must send these notices each year, and the notice must inform Medicare recipients if their coverage qualifies as “creditable” or “non-creditable” under the law. With regard to Part D eligible recipients, the notice would pertain to their prescription drug coverage.

What is creditable coverage? Creditable coverage simply means that the provisions of the healthcare plan (or in this case, prescription plan) offer coverage at least equal to what Medicare would provide to that individual. You might be enrolled in an employer’s healthcare plan which includes prescription drug coverage, and now that you’ve turned 65,  you’re also eligible for Medicare. If you’ve elected to remain on your employer’s healthcare plan, they must notify you regarding whether or not your plan offers creditable coverage, or meets Medicare standards.

What is non-creditable coverage? Of course, this means the opposite is true. Non-creditable coverage simply means that the plan does not provide coverage that qualifies under Medicare standards.

Why does creditable coverage matter? As you probably know, most of us are required to enroll in Medicare when we turn age 65. But if you’re enrolled in a plan that offers creditable coverage, you can delay your enrollment until you’re no longer covered by that plan.

Normally, failing to enroll in Medicare on time would result in a penalty, in the form of higher Medicare premiums when you do eventually enroll. But if you’ve maintained creditable coverage, that penalty won’t apply. Later, when your creditable coverage ends due to retirement or other reasons, you can enroll in Medicare with no penalty.

Give us a call if you have any further questions about your notice of creditable coverage, or if you aren’t sure what to do next. We can help both Medicare beneficiaries and employers understand the requirements and make informed decisions.