Fair Square Medicare Wordmark

What You Need to Know About Creditable Coverage

Health insurance form on a table with pen, calculator and glasses stock image
By Daniel Petkevich
Jan 18, 2023

Can you stick with employer insurance or move to Medicare?

As soon as you turn 65, you are likely inundated with mail and people reaching out to get you to sign up for Medicare. But you may not need to sign up if you are still working and have creditable coverage. How can you tell if you have creditable coverage? Read on to find out.

Stay Up to Date on Medicare!

Join the Fair Square Medicare Newsletter to stay informed on cost savings, changes to Medicare, and other valuable healthcare information.

What is creditable coverage?

Creditable coverage is insurance coverage that you can keep instead of Medicare. For your insurance coverage to qualify as creditable, it must have benefits as good if not better than what you get with Medicare. Typically, your private insurance coverage is creditable if you work for a company with at least 20 employees. But there are exceptions, so we recommend you check with your company's human resources department to verify that you have creditable coverage.
Employer/Union and other group health plans are required to provide Medicare-eligible employees with a Notice of Creditable Coverage each year by October 15th.

What if you don't have creditable coverage?

Suppose you do not have creditable coverage and you choose not to enroll in Medicare. In that case, you will likely face a lifetime Late Enrollment Penalty (LEP) in addition to your monthly premium. For

Part B

, this penalty is 10% of the base national monthly premium ($164.90 for 2023) for every 12 months you were without coverage. For

Part D

, this penalty is 1% of the "national base beneficiary premium" ($32.74 in 2023) for every month you were without coverage.
For example, if you turned 65 this year and did not enroll in Medicare for a year despite not having creditable coverage, your monthly premiums would be $181.39 for Part B ($164.90 + $16.49) and $36.67 ($32.74 + $3.93) for Part D.
In the example above, $32.74 is an average premium, but the penalty will be in addition to whatever your monthly premium is for your specific plan.

What if you have creditable coverage?

The decision on whether to keep your insurance is something we've covered before when considering

employer's insurance

, either yours or

your spouse's

. The general rule of thumb is that if you have creditable coverage, stick with it. If you aren't a fan of your current insurance and want to switch to Medicare, talk with one of our licensed insurance experts at

Fair Square Medicare

. We can give you an honest assessment of how your current policy stacks up to what you can get with Medicare.
Some people decide to double up on coverage. For example, people like to add

Medicare as a secondary payer

option while private insurance pays primary. Our agents can work with you to figure out what's best, but the important thing to know is that you may not need to sign up for Medicare if you have creditable coverage. You will have a special enrollment period (SEP) to enroll in Part B and/or Part D when you retire.

What about Part D creditable coverage?

The standards for Part D are as follows. To be considered creditable, your private health insurance plan must:
  • Pay at least 60% of prescription drug costs
  • Cover name brand and generic drugs
  • Include a variety of pharmacies to choose from
  • Not have a low deductible or an annual benefit cap amount
As mentioned earlier, you should receive a Notice of Creditable Coverage.

Notice of Creditable Coverage

The

Notice

of Creditable Coverage

is the form your employer or union sends you by October 15 to inform you that your health plan meets the minimum standards required by Medicare. You don't need to do anything but hang on to this notice if you join a Part D plan later. Medicare's website recommends that you do not send in your Notice of Creditable Coverage.

Is COBRA considered creditable coverage?

COBRA is an individual policy created to mimic your former employer's group health plan. COBRA is not creditable coverage. So you will need to sign up for Medicare. Referencing the primary vs. secondary distinction from earlier, COBRA pays secondary to Medicare because it does not offer suitable coverage. In addition to COBRA following insurance options are not replaceable for creditable coverage:
  • Some retirement plans
  • CHAMPVA

    (for Parts A & B)
  • Veterans Benefits (for Parts A & B)
  • TRICARE

    (for Parts A & B)
CHAMPVA, Veterans Benefits, and TRICARE might be creditable coverage for your Part D prescription drug plan (however, for Veterans Benefits if a non-VA doctor prescribes a prescription they will not fill/cover it).

GoodRx

is not considered creditable (although it is a great resource for coupons and information). Reference the four qualifications above to see if your prescription drug plan is considered creditable.

Takeaway

You can keep your employer's health insurance policy as long as it's creditable coverage. If you don't have creditable coverage, you should sign up for Medicare as soon as possible. You could face penalties for not switching to Medicare, depending on your situation. If you have a unique case not listed above, call us today at 1-888-376-2028. Our team of experts is trained to help work through all kinds of problems.

Stay Up to Date on Medicare!

Join the Fair Square Medicare Newsletter to stay informed on cost savings, changes to Medicare, and other valuable healthcare information.

Recommended Articles

Cover image
The Fair Square Bulletin: August 2023
Aug 28, 2023
Medigap on a post-it note surrounded by a stethoscope stock image
Do Medicare Supplement Plans Cover Dental and Vision?
Dec 8, 2022
senior woman doing botox stock photo
Is Botox Covered by Medicare?
Jan 19, 2023
Medsupp Thumbnail
Plan G vs. Plan N
Jan 28, 2022
Closeup of a male Doctor or physiotherapist doing stretching for a patient in the clinic for examining treating injured of back stock photo
Does Medicare Cover Chiropractic Visits?
Dec 22, 2022
Cover image
How Often Can I Change Medicare Plans?
May 5, 2023
Asian senior male patient having him eyes examined by laser machine
Finding the Best Vision Plans for Seniors
Jan 6, 2023
The feet of a person suffering from foot pain stock photo
Does Medicare Cover Cartiva Implants?
Nov 29, 2022
a variety of pills in a daily pill organizer stock image
Does Medicare Cover Vitamins?
Dec 5, 2022
alphabet_soup
How to Choose a Medigap Plan
Jan 10, 2023
senior man on a phone call stock image
What is a Medicare Beneficiary Ombudsman?
Apr 11, 2023
Doctor physician consulting with male patient in hospital exam room stock photo
Is Gainswave Covered by Medicare?
Dec 6, 2022
Happy senior man and dentist assistant talking during appointment at dental clinic. stock photo
Finding the Best Dental Plans for Seniors
Jan 4, 2023
senior man pondering "which medigap plan should i choose" stock photo
Comparing All Medigap Plans | Chart Updated for 2023
Aug 1, 2022
Seattle Public Market stock image
14 Best Ways for Seniors to Stay Active in Seattle
Mar 10, 2023
Unrecognizable person undergoing surgery in the clinic stock photo
Does Medicare Cover Robotic Surgery?
Nov 28, 2022
Senior couple working at a computer stock image
Do I Need Medicare If My Spouse Has Insurance?
Dec 19, 2022
Dames Point Bridge in Jacksonville, Florida stock image
13 Best Ways for Seniors to Stay Active in Jacksonville
Mar 3, 2023

More of our articles

13 Best Ways for Seniors to Stay Active in Columbus

20 Questions to Ask Your Medicare Agent

Are Medicare Advantage Plans Bad?

Can I Change Medicare Advantage Plans Any Time? | Medicare Plans

Can I Choose Marketplace Coverage Instead of Medicare?

Can I Use Medicare Part D at Any Pharmacy?

Can Medicare Advantage Plans Deny Coverage for Pre-Existing Conditions?

Can Medicare Help with the Cost of Tyrvaya?

Costco Pharmacy Partners with Fair Square

Do You Need Medigap if You're Eligible for Both Medicare and Medicaid?

Does Medicare Cover a Spinal Cord Stimulator?

Does Medicare Cover Abortion Services?

Does Medicare Cover an FMT?

Does Medicare Cover Bladder Sling Surgery?

Does Medicare Cover Breast Implant Removal?

Does Medicare cover Deviated Septum Surgery?

Does Medicare Cover Diabetic Eye Exams?

Does Medicare Cover ESRD Treatments?

Does Medicare Cover Geri Chairs?

Does Medicare Cover Hepatitis C Treatment?

Does Medicare Cover Home Heart Monitors?

Does Medicare Cover Hypnotherapy?

Does Medicare Cover Incontinence Supplies?

Does Medicare Cover Inspire for Sleep Apnea?

Does Medicare Cover Ketamine Infusion for Depression?

Does Medicare Cover Kidney Stone Removal?

Does Medicare Cover Krystexxa?

Does Medicare Cover Kyphoplasty?

Does Medicare Cover Nexavar?

Does Medicare Cover Nuedexta?

Does Medicare Cover Orthodontic Care?

Does Medicare Cover Ozempic?

Does Medicare Cover Qutenza?

Does Medicare Cover TENS Units?

Does Medicare Cover the WATCHMAN Procedure?

Does Medicare Cover Urodynamic Testing?

Does Medicare Cover Xiafaxan?

Does Medicare Cover Zilretta?

Does Medicare Have Limitations on Hospital Stays?

Does Medicare Pay for Antivenom?

Does Medicare pay for Opdivo?

Does Medicare Pay for Varicose Vein Treatment?

Does Medicare Require a Referral for Audiology Exams?

Everything About Your Medicare Card + Medicare Number

Fair Square Bulletin: We're Revolutionizing Medicare

How Does Medicare Cover Colonoscopies?

How Much Does a Medicare Coach Cost?

How to Become a Medicare Agent

How to Deduct Medicare Expenses from Your Taxes

How Your Employer Insurance and Medicare Work Together

Is Balloon Sinuplasty Covered by Medicare?

Is Displacement Affecting Your Medicare Coverage?

Is Fair Square Medicare Legitimate?

Is the Shingles Vaccine Covered by Medicare?

Is Vitrectomy Surgery Covered by Medicare?

Medicare & Ozempic

Medicare Explained

Medicare Supplement Plans for Low-Income Seniors

Medigap vs. Medicare Advantage

Saving Money with Alternative Pharmacies & Discount Programs

Should You Work With A Remote Medicare Agent?

The Fair Square Bulletin: February 2024

The Fair Square Bulletin: June 2023

What Are Medicare Part B Excess Charges?

What Does Medicare Cover for Stroke Patients?

What Happens to Unused Medicare Set-Aside Funds?

What to Do When Your Doctor Doesn't Take Medicare

What You Need to Know About Creditable Coverage

When Can You Change Medicare Supplement Plans?

Which Medigap Policies Provide Coverage for Long-Term Care?

Will Medicare Cover Dental Implants?

Will Medicare Cover it?

Your Medicare One-Stop-Shop

Your guide to Medicare Parts A & B, Medicare Advantage, and Medigap. 100% free.
Get the Fair Square Bulletin

Medicare savings tips, helpful guides, and more.

About

Medicare 101

Current Clients

Medicare Supplement Plans

Medicare Advantage Plans

Fair Square 2024

Terms of Use
Notice of Privacy Practices

Virgil Insurance Agency, LLC (DBA Fair Square Medicare) and www.fairsquaremedicare.com are privately owned and operated by Help Button Inc. Medicare supplement insurance plans are not connected with or endorsed by the U.S. government or the federal Medicare program. This is a solicitation of insurance. A licensed agent/producer may contact you. Medicare Supplement insurance is available to those age 65 and older enrolled in Medicare Parts A and B and, in some states, to those under age 65 eligible for Medicare due to disability or End-Stage Renal disease. Virgil Insurance Agency is a licensed and certified representative of Medicare Advantage HMO, HMO SNP, PPO, PPO SNP and PFFS organizations and stand-alone PDP prescription drug plans. Each of the organizations we represent has a Medicare contract. Enrollment in any plan depends on contract renewal. The plans we represent do not discriminate on the basis of race, color, national origin, age, disability, or sex. Plan availability varies by region and state. For a complete list of available plans please contact 1-800-MEDICARE (TTY users should call 1-877-486-2048), 24 hours a day/7 days a week or consult www.medicare.gov. © 2024 Help Button Inc

We do not offer every plan available in your area. Any information we provide is limited to those plans we do offer in your area. Please contact Medicare.gov or 1-800-MEDICARE to get information on all of your options.

MULTIPLAN_FairSquareMedicare_01062022_M