What is Creditable Coverage?
Creditable coverage means, with respect to an individual, coverage of the individual under any of the following types of plans: • a group health plan; • Part A or B of Medicare; • Medicaid; • CHAMPUS; • a medical care program of the Indian Health Service or tribal organizations; • a state health benefits risk pool, such as CHIP; • the federal employees health benefits program; • a public health plan; (a plan established or maintained by a State, county, or other political subdivision of a State that provides health insurance coverage to individuals) • a health benefit plan under the Peace Corps Act; or • a church plan.
Prescription drug coverage is creditable if the actuarial value of the coverage equals or exceeds the actuarial value of standard prescription drug coverage under Medicare Part D, as demonstrated through the use of generally accepted actuarial principles and in accordance with Centers for Medicare and Medicaid Services (CMS) actuarial guidelines. In general, the actuarial equivalence test measures whether the expected amount of paid claims under the employer’s prescription drug coverage is at least as much as the expected amount of paid claims under the standard Part D benefit. View the frequently asked questions document for more information or visit the CMS Creditable Coverage website for more information about creditable coverage, including access to model disclosure communication templates published by CMS. Updates are made regularly, so please check the websites often for the most up-to-date information. What do you need to do? The Medicare Modernization Act (MMA) mandates that ce
Most health coverage is creditable coverage, such as coverage under a group health plan (including COBRA continuation coverage), HMO, individual health insurance policy, Medicaid or Medicare. Creditable coverage does not include coverage consisting solely of excepted benefits, such as coverage solely for limited-scope dental or vision benefits. Days in a waiting period during which an individual has no other coverage are not creditable coverage under the plan, nor are these days taken into account when determining a significant break in coverage (generally a break of 63 days or more). This 63-day break period may be extended under state law if the coverage is insured through an insurance company or offered through an HMO. Check with your State Insurance Commissioner’s Office to see whether a longer break period applies to you.
