Creditable Coverage: Requirements, Pre-Existing Conditions

By

澳洲幸运5官方开奖结果体彩网:Julia Kagan

Updated September 29, 2023

Reviewed by Eric Estevez

Part of the Series

Guide to Medicare

Whatℱ Is Medicare? How It Works, Who ꦇQualifies, and How To Enroll

Medicare Basics

How Medicare Works

Medicare Part D (Prescriptions)

Medigap Insurance

Medicare Advantage (Part C)

Medicare vs. Medicaid

What Is Creditable Coverage?

Creditable coverage is a health insurance, prescription drug, or other health benefit plan that meets a minimum set of qualifications. Types of creditable coverage plans include group and individual health plans, and student health plans, as well as a variety of government-sponsored or government-provided plans. Creditable coverage is used to determine whether policyholders have to pay late enrollment penalties or, in some cases, coverage and costs associated with pre-existing conditions.

Key Takeaways

Creditable coverage is a health benefit, prescription drug, or health insurance plan—including individual and group health plans—that meet a minimum set of qualifications.
Creditable coverage is a measure used to figure out if policyholders must pay late enrollment penalties or, in some cases, coverage and costs associated with pre-existing conditions.
Most companies offering prescription drug coverage to Medicare-eligible beneficiaries have to disclose their status as creditable or non-creditable coverage programs.

How Creditable Coverage Works

Creditable coverage is most closely associated with prescription drug coverage. Most companies that provide prescription drug coverage to Medicare-eligible beneficiaries must disclose their status as creditable or non-creditable coverage. Creditable coverage means that the policy meets or exceeds the coverage offered by a 澳洲幸运5官方开奖结果体彩网:Medicare Part D prescription drug plan.

This disclosure provides Medicare-eligible beneficiaries with important information relating to their Medicare Part D enrollment and is mandatory whether the insurer is primary or secondary to Medicare. If the policyholder’s coverage is considered creditable, they may be eligible for subsidies. A creditable coverage notice also allows prescription drug policyholders who are not using Medicare to avoid paying a Part D late enrollment penalty.

Important

Make sure to hold on to a creditable coverage notice because you may want to join a Medicare drug plan in the future and will need to prove you don’t owe penalties. Medicare beneficiaries not covered under creditable prescription drug coverage, and who choose not to enroll before the end of their initial enrollment period for Part D, will usually have to pay a higher premium on a permanent basis if they subsequently enroll.

Creditable Coverage Requirements

In order to be con🐷sidered creditable, a prescription drug pl꧙an must meet these four requirements:

Provide coverage for both brand and generic prescription medication
Provide the policyholder with a reasonably broad option of medication providers, or a mail-order option
Pay at least 60% of the cost of prescription expenses
Either not have an annual benefit maximum, or have a low deductible

You may have creditable coverage through a current or former employer, trade union, or one oᩚᩚᩚᩚᩚᩚ⁤⁤⁤⁤ᩚ⁤⁤⁤⁤ᩚ⁤⁤⁤⁤ᩚ𒀱ᩚᩚᩚf the following:

Federal Employee Health Benefits (FEHB) Program
Veterans' Benefits
TRICARE (military health benefits)
Civilian Health and Medical Program of the Department of Veterans Affairs (CHAMPVA)
Indian Health Services

You also might have creditable coverage if you get health insurance coverage through your spouse's employer or if you’re on a COBRA plan.

Creditable Coverage and Pre-Existing Conditions

Some people with 澳洲幸运5官方开奖结果体彩网:pre-existing conditions may find that their conditions are excluded from their health insurance plan coverage, although this is no longer the norm thanks to the 澳洲幸运5官方开奖结果体彩网:Affordable Care Act (ACA). Some policies still allow insurers to apply an 澳洲幸运5官方开奖结果体彩网:exclusion period to these conditions, which increౠase the costs for which you are respဣonsible.

The passage of the ACA blocked many insurers from being able to use this exclusion period but it can still happen because they have been covered by previous policies. Medicare typically covers pre-existing conditions without lengthy waits.

Fast Fact

A legacy individual health insurance policy is one that you bought for yourself or your family on or before March 23, 2010, that has not been changed in certain ways that reduce benefits or increase costs to consumers.

If you have prior creditable coverage, it can reduce the exclusion period since creditable coverage means that you had insurance over a period of time. But there is a limited window in which creditable coverage applies. If you let your coverage expire without obtaining new coverage within a certain number of days, for example, you may be responsible for some penalties.

What is creditable coverage?

Creditable 🐻coverage is a health insurance or health benefit plan that meets ওa minimum set of qualifications. Some examples include group and individual health plans, student health plans, and government-provided plans.

How do I know if I have creditable coverage?

In order to be considered creditable, the coverage plan's prescription drug coverage must meet or exceed the value of Medicare Part D. Most companies offering prescription drug coverage are required to disclose their status as creditable or non-creditable coverage programs.

澳洲幸运5官方开奖结果体彩网:

Will my preexisting conditions be covered by Medicare?

It depends what coverage you have. For the first six months of coverage, Medigap insurance companies can refuse to cover extra costs from preexisting conditions. After six months, the Medigap policy will cover your pre-existing condition. For another option, you can join Medicare Advantage, even with preexisting conditions.

Article Sources

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