Glossary
Creditable coverage
Creditable coverage is drug coverage expected to pay, on average, at least as much as standard Medicare Part D. If you keep creditable coverage — often from an employer, union, or the VA — you can delay Part D without a late-enrollment penalty. Your plan must tell you each year whether your coverage is creditable.
The term matters most for timing. Part D charges a permanent penalty if you go 63 days or more without drug coverage after you are first eligible — unless the coverage you already had counts as creditable. That exception is what lets people on solid employer or VA drug plans wait to enroll.
Coverage providers send a notice each year stating whether their plan is creditable. Keep that notice; it is the proof you may need to avoid a penalty later.
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