Creditable Benefit Plans
Medicare beneficiaries can receive subsidized prescription drug coverage through the Medicare Part D program.
Beneficiaries who choose not to sign up at the first opportunity may have to pay more if they wait to enter the program later after the open enrollment period.
Beneficiaries who have other sources of 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 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 if they sign up later for the Medicare drug benefit.
Employers and Unions that sponsor group health plans for employees or retirees are required to provide disclosure notifications to their employees regardless of whether those entities are eligible for, and elect to apply for, the retiree drug subsidy under Section 1860D-22 of the Social Security Act, 42 U.S.C.
The Centers for Medicare and Medicaid Services (CMS) provides complete guidance for employers and model disclosure letters to use with employees. Please visit CMS’s Creditable Coverage website for the most recent information.