Creditable coverage

What it means

A retiree or employer drug benefit that meets the standard counts as creditable, which is what lets somebody delay Part D without a late penalty.

Losing it involuntarily, or having it reduced so that it is no longer creditable, is a named circumstance that opens a special enrollment period.

Losing it because a premium was not paid is expressly not treated as an involuntary loss.

Why it matters

It is the difference between changing plans when a retiree benefit ends and waiting until the autumn with no drug cover.

It also decides whether a late-enrollment penalty applies.

When you are likely to meet it

• When a former employer ends or changes a drug benefit.
• When a parent who never enrolled in Part D needs to.

Related terms

• MedicareThe federal health insurance program for people aged sixty-five and over, and for some younger people with disabilities. It does not pay for long-term care.
• Medicare AdvantageMedicare delivered by a private insurance plan instead of directly by the government. It is also called Part C.
• Medicare Part DMedicare's prescription drug coverage, bought as a separate plan from a private insurer.
• MedigapA private policy that pays some of what Original Medicare leaves the patient to pay. It cannot be combined with a Medicare Advantage plan.
• Special enrollment periodA window outside the annual one in which Medicare coverage can be changed, opened by a named life event.

Official sources

The authority this page describes, at the agency that publishes it. Sahvelo does not restate a rule from a secondary source.

• Medicare — how Part D works with other insurance (opens in a new tab)

Sahvelo guidance that uses this

• Moving a parent
• Medicare