What Is Creditable Coverage?

“Creditable coverage” is health insurance that is considered at least as good as Medicare’s standard coverage.

  • If you have creditable coverage when you become eligible for Medicare, you may delay enrolling without paying late enrollment penalties later.

  • If you don’t have it, you could face lifetime penalties that increase your monthly premiums.

How to Know if You Have Creditable Coverage

Not every plan counts. Here’s how to check:

  • Employer or Union Coverage

    • If your employer has 20 or more employees (or your spouse’s employer does), your group health plan is usually creditable.

    • If fewer than 20 employees, Medicare is typically primary, and your plan may not count as creditable.

  • Prescription Drug Coverage

    • Your plan must be as good as or better than Medicare Part D’s standard prescription coverage.

    • Each year, your insurance company will send you a “Notice of Creditable Coverage.” Keep this letter in your records.

  • Other Types of Coverage

    • VA benefits, TRICARE, and some retiree plans often count as creditable coverage, but rules can vary.

Avoid Penalties:

  • Part B (medical insurance) penalties add 10% for every 12 months you delay enrollment without creditable coverage.

  • Part D (drug plan) penalties add 1% of the national base premium for every month you go without creditable coverage.

  • Peace of Mind: Having proof of creditable coverage lets you transition to Medicare without worrying about higher costs.

Why Creditable Coverage Matters

What to Do Next

Look for your annual “Notice of Creditable Coverage.”

  1. Confirm with your employer’s HR or benefits office whether your plan counts.

  2. Save all documentation in case Medicare ever asks for proof.

  3. Talk with a licensed agent (that’s me!) if you’re not sure how your current coverage interacts with Medicare.