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Is Your Coverage Creditable?

Hello Toni:

 Turned 65 in August 2015, continued to work full-time with excellent company benefits, and I decided to delay Part B until March 31stwhen I retired.  I enrolled in a Medicare supplement plan G and a Part D prescription drug plan with an April 1ststart date.  

 I have received a notice from CMS (Medicare) saying they do not have record of me having prescription drug coverage that “met Medicare’s minimum standards from 8/1/2015 to 4/1/2018 and I may receive a Part D late enrollment penalty. My company’s HR director told me not to worry because the employer health plan has creditable coverage. What does that mean?  

 I thought applying for Part B keep me from a Part D penalty. Can you please advise me what to do? I do not understand any of this! 

 Thank You,

Cynthia from Tallahassee, FL



Americans retiring after 65, that are leaving company health plans and applying for Medicare Parts A and B must prove they have “creditable coverage” when applying for Medicare Part D.

Taking the “Request for Employment Information” form to Social Security to avoid the “famous” Medicare Part B penalty informs Medicare that you have had employer benefits since turning 65. The form does not inform Medicare that you had “creditable” prescription drug coverage.

Cynthia, the letter you received from the Medicare Part D plan that you enrolled in, explains what you should do to inform Medicare what prescription drug coverage you have had by either calling an 800 number or has a form describing what type of coverage you had which you can mail back to the Medicare Part D plan you enrolled in.

TheMedicare & You handbook states: “Creditable prescription drug coverage could include drug coverage from a current or former employer or union, TRICARE, Indian Health Service, the VA or health insurance coverage.  Your plan must tell you each year if your drug coverage is “creditable coverage”.  This information may be sent to you in a letter or included in a newsletter from the plan.  Keep this information because you may need it when or if you join a Medicare drug plan late.”

The handbook, does NOT advise what creditable coverage is.  Creditable drug coverage should “meet or exceed” what Medicare’s Part D plan minimums are for that current year.

Puzzling, I know… Medicare does not regard discount prescription drug cards or low-cost generics programs as “creditable coverage”. These types of plans cannot keep you from the Late Enrollment Penalty.

BUT…Medicare DOES consider receiving your prescription drugs from the VA as creditable coverage. So the VA is a good option.

Your late enrollment period (LEP) does not begin from the day you lose or leave your company health plan, BUT from the month you turned 65 or began your Medicare and is based on when Part A of Medicare begins not Part B.

This LEP (late enrollment period) penalty can be because:

  • You waited past 63dayswithout creditable prescription drug coverage when you are leaving company benefits and you are older than 65 years old and 90 days. Don’t wait past 63 days to get Part D when leaving company health plans.
  • Your company prescription drug benefits (not health benefits) are not creditable as Medicare declares.
  • You simply never enrolled in Medicare Part D when you were first eligible and want to enroll.


Toni King

Toni King, author of the 2018 Medicare Survival Guide® Advancededition which is available for sale at the  The wait is over… ABBS (American Baby Boomer Society) an Association for Baby Boomers is now available at



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