Prescription Drug Creditable Coverage and Medicare Part D

By Salli Brandon
eMedicareSupplements Staff Writer

You have creditable coverage when you have prescription drug coverage through your or your spouse's employer and the prescription drug coverage is expected to pay, on average, at least as much as Medicare's standard prescription drug coverage. When you have creditable coverage, you probably do not have Medicare Part D. That's because for most people it does not make sense to have two prescription drug plans. Also, having creditable coverage means you can enroll in Medicare Part D after your initial election period without paying a higher premium.

Even though you do not have to enroll in Medicare Part D while you have creditable coverage, you still have the option to enroll in Medicare Part D every year between November 15^th and December 31^st. Your Part D coverage starts January 1^st as long as the carrier receives the application by December 31^st. In order to help you make a decision of whether or not to enroll in Medicare Part D during the annual enrollment period, you will receive an annual notice from the insurance carrier that provides you with prescription drug coverage. You should receive this notice prior to November 15^th every year. Be sure to contact your insurance carrier if you do not receive the notice.

The annual notice you will receive from the insurance carrier is called the Creditable Coverage Disclosure Notice. The notice will tell you if your current prescription drug is creditable coverage, when you are able to sign up for Part D coverage, and what happens to your group prescription drug coverage if you decide to enroll in Part D. Based on the information provided to you in the notice, you will be able to decide if you should enroll in Part D during the annual enrollment period or not.