Creditable coverage: Understanding your prescription drug coverage

Not everyone who’s eligible for Medicare chooses to enroll in Part D. There are alternative prescription drug coverage options you can choose instead. But the coverage needs to be considered creditable, or you may incur a lifetime penalty. Here’s what you need to know about creditable coverage, including what it means, how to tell if your plan qualifies and more. Who needs to understand creditable coverage All current and upcoming Medicare beneficiaries should understand how creditable coverage works, including: Seniors soon to turn 65 People eligible for Medicare due to disability or end-stage renal disease Retirees looking to keep their employer-sponsored drug coverage or enroll in Part D It’s also important that employers, plan sponsors, HR, or benefit professionals understand creditable coverage, so they can remain in compliance. What is creditable coverage? To be considered creditable, a prescription drug plan must pay at least as much for prescription drugs as Medicare Part D. Creditable coverage can come from multiple sources, including: Current or former employer-sponsored health plans Union plans Retiree health plans Government programs like TRICARE, the Indian Health Serv...