What is Creditable Coverage?
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 you have 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 your 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.
Beneficiaries who have other sources of current drug coverage – through a current or former employer or union, for example – may stay in that plan and choose not to enroll in the Medicare drug plan. If their other coverage is at least as good as the new Medicare drug benefit (and therefore considered “creditable coverage”), then the beneficiary can continue to get the high quality care they have now as well as avoid higher payments later if they later sign up for the Medicare drug benefit. 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 CMS actuarial guidelines. In general, the actuarial equivalence test measures whether the expected amount of paid claims under the entity’s prescription drug coverage is at least as much as the expected amount of paid claims under the standard P
Creditable coverage is coverage from a plan other than a Medicare Part D plan that offers prescription drug coverage as good as or better than Medicare Part D coverage. If you currently have a prescription drug coverage that is considered creditable coverage, you may keep your coverage and wait to enroll in Part D. If you decide later to enroll in Part D, you will not have to pay a late enrollment penalty.
Beneficiaries who have other sources of current drug coverage – through a current or former employer or union, for example – may stay in that plan and choose not to enroll in the Medicare prescription drug plan. If their other coverage is at least as good as the new Medicare drug benefit (and therefore considered “creditable coverage”), then the beneficiary can continue to get the high quality care they have now as well as avoid higher payments later if they later sign up for the Medicare drug benefit. 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 CMS actuarial guidelines. In general, the actuarial equivalence test measures whether the expected amount of paid claims under the entity’s prescription drug coverage is at least as much as the expected amount of paid claims under t
A. Creditable coverage is coverage, from a plan other than a Part D plan that meets certain Medicare standards. If you currently have prescription coverage that is considered creditable coverage, you may keep that coverage and wait to enroll in a Part D plan. If you later decide to enroll in a Part D plan, you will not have to pay a late enrollment fee.
