Creditable Coverage: what you need to know

Creditable coverage means your current health or drug insurance is as good as Medicare. If your plan is creditable, you can delay Medicare without late‑enrollment penalties.

Your medical coverage is creditable if:

• You’re covered under active employment (yours or your spouse’s) AND
• The employer has 20 or more employees

If either is not true, the coverage is not creditable, and delaying Part B may cause lifelong penalties.

These do not allow you to delay Part B without penalty:

• COBRA
• Retiree coverage
• Marketplace/ACA plans
• Small employer plans (<20 employees)
• VA medical coverage (VA is not creditable for Part B)

If you delay Part B without creditable coverage, Medicare adds a 10% penalty for every 12 months you went without it. This penalty lasts for life. 

Drug coverage is creditable if it pays at least as much as a standard Medicare Part D plan.

Each year, your plan should send a Notice of Creditable Coverage. Keep this letter—it’s your proof.

If you go 63+ days without creditable drug coverage, Medicare adds a permanent penalty to your Part D premium.

•  Employer or union drug plans
• TRICARE
• VA drug coverage
• Some retiree plans

Knowing whether your coverage is creditable helps you:

• Avoid lifelong Medicare penalties
• Enroll at the right time
• Coordinate employer benefits with Medicare