What is Creditable Coverage?
Creditable Coverage refers to the substantiation of a Medicare-eligible individual’s current prescription drug coverage as being equal to or better than that of Medicare Part D’s drug benefit.
Medicare beneficiaries, who have other sources of drug coverage such as through a current or former employer, may stay in that plan and choose not to enroll into the Medicare Part D drug plan. This allows the beneficiary to avoid paying higher premiums to Medicare and continue receiving the high-quality drug coverage that they have now. However, their current coverage must be at least as good as the Medicare drug benefit.
What is Medicare Part D?
Medicare Part D is a federal program that subsidizes the cost of prescription drugs for Medicare beneficiaries in the United States.
The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 added the drug benefit in 2006. Part D, however, is not part of the “original” Medicare program containing Part A, hospital coverage or Part B, medical coverage (physician/outpatient). It is additional coverage that may be purchased through private insurance carriers. Two types of private plans are available to Medicare beneficiaries, Medicare Advantage or a Prescription Drug Plan (PDP).
You can join a Medicare drug plan when you first become eligible for Medicare and each year from November 15 through December 31. Medicare beneficiaries MUST specifically choose and enroll in one of the two plans in order to obtain the prescription drug benefit.
Who receives Notice of Creditable Coverage?
Individuals who are eligible to receive Medicare Part D receive notice of creditable coverage. This plan is offered to Medicare beneficiaries in the United States. Most school districts offer Medicare-eligible employees and covered dependents a prescription drug plan that is better than the one offered through the Medicare D program that began in May 2006. Districts are required to send a notification to employees who are directly affected by the Medicare D program. They are also required to provide a district-wide notification to all employees regarding their prescription plan being a Creditable Coverage Program.
Employees who are eligible for Medicare Part D and covered under their district’s health plan should ensure that they have all the necessary documentation (Creditable Coverage Disclosure Notice) on file should they have to switch to the Medicare D prescription drug program at a later date. Without this documentation, additional fees may apply to prescription drugs that are filled.
In order to be Medicare eligible, employees need to meet one of the following requirements:
1) Age 65 or older;
2) Individuals under age 65 with Medicare-authorized disabilities (you'll know if you are in this category as you would have applied for Medicare because you or a covered family member have a disability); or
3) People with End-Stage Renal Disease (ESRD), which is permanent kidney failure requiring dialysis or a kidney transplant.
Districts are also required to update their Creditable Coverage notification each time their health plan changes or when new plans are offered.
What are Creditable Coverage deadlines?
The Creditable Coverage notice must be sent to Medicare beneficiaries by November 15.
The deadline for enrollment into Medicare Part D is October 31.