Creditable coverage is any health insurance or prescription drug coverage that meets or exceeds the value of Medicare coverage. If you have creditable coverage, you can delay enrolling in Medicare Part B or Part D without incurring a late enrollment penalty. If your coverage is not creditable, delaying enrollment will cost you.
Creditable Coverage for Part B vs. Part D
The rules for creditable coverage differ depending on which part of Medicare you are delaying:
| Medicare Part | What Counts as Creditable | What Does Not Count |
|---|---|---|
Part B (medical) | Active employer group health plan from a company with 20+ employees (your own or spouse's) | COBRA, retiree insurance, VA benefits, individual market plans, ACA marketplace plans |
Part D (drugs) | Employer drug coverage that is actuarially equivalent to or better than standard Part D | Coverage that does not meet the actuarial standard - your employer must notify you each year |
Not All Employer Coverage Is Creditable for Part B
If your employer has fewer than 20 employees, their group health plan is not considered creditable for Part B purposes. Medicare becomes your primary payer and you should enroll in Part B during your Initial Enrollment Period to avoid gaps and penalties.
How to Prove Creditable Coverage
When you eventually enroll in Medicare after a delay, you may need to prove you had creditable coverage to avoid the late enrollment penalty. For Part B, Social Security will typically verify your employer coverage directly. For Part D, keep the annual notice of creditable coverage that your employer or plan is required to send you each year before October 15. This letter is your proof.
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