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Medicare Creditable Coverage Notice Requirements

Group health plan sponsors that provide prescription drug coverage to Medicare-eligible members must notify these members whether or not their coverage is creditable. Creditable coverage means that the plan is expected to pay on average as much as the standard Medicare prescription drug coverage.

The Medicare Modernization Act imposes a late-enrollment penalty on individuals who do not maintain creditable coverage for any period of 63 days, or longer, following their initial enrollment period for the Medicare prescription drug benefit. This penalty is a key factor in the decision that retirees make to enroll in a Part D plan. Therefore, the creditable coverage notice is essential to helping retirees make informed Part D enrollment decisions.

For more information on the requirements and penalty, download our fact sheet.

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