2013 Group plan coverage

If you’re covered by a union, employer or other group, you may have creditable prescription drug coverage. That is, a drug plan that is expected to pay, on average, at least as much as Medicare’s standard prescription drug coverage. People who have this kind of coverage when they become eligible for Medicare can generally keep that coverage without paying a penalty if they decide to enroll in Medicare prescription drug coverage later.

Your employer (or the plan that administers your retiree drug coverage) should provide information (called a creditable coverage disclosure notice) to you about how your retiree health or drug coverage will be affected if you join a Medicare plan. This information will also tell you how your retiree drug coverage compares to the Medicare prescription drug coverage.

If you have creditable coverage, you won't have to pay a penalty if you drop or lose your coverage. If you involuntarily lose the coverage, you must join a Medicare drug plan with an effective date that is within 60 days of the coverage end date. If you choose to drop the coverage, you must join a Medicare drug plan within three months of dropping the coverage. However, if you don’t enroll in a Medicare drug plan and have a period of 63 days or longer without coverage that is creditable (it expects to pay at least as much as Medicare's coverage), you may have to pay a penalty when you do enroll.

Keep a copy of the notice that says you have creditable coverage. If you join a Medicare drug plan after you’re first eligible, you'll need to provide this as proof to avoid a penalty.

If you qualify for extra help to pay for Medicare drug coverage, it is possible that you could get better coverage if you join a Medicare drug plan.

If your current employer or union coverage is not expected to pay, on average, at least as much as the standard Medicare drug coverage, that drug plan is considered non-creditable. You may be able to:

• Keep your current employer or union drug plan and join a Medicare drug plan that gives you more complete coverage, or keep only your current employer or union health plan. If you join a Medicare drug plan after you’re first eligible, you'll have to pay a late enrollment penalty.

• Drop your current coverage and join a Medicare prescription drug plan (PDP) or a Medicare Advantage drug plan.

If you drop your employer or union coverage, you may not be able to get it back. You may not be able to drop your employer or union drug coverage without also dropping your employer or union health coverage.

In some cases, employers or unions have rules that say you cannot have both a Medicare drug plan and your employer or union plan. Your current coverage may end for you and your dependents.

If you are covered under COBRA, you should check with your former employer or union or the benefits administrator to see if the coverage is creditable.

Workers' compensation, discount drug card programs and manufacturer patient assistance programs are not considered creditable coverage.

Federal government rules do not permit individuals who have a group Medicare Advantage medical plan through an employer or union group to also have a stand-alone Part D prescription drug plan.

If you enroll in a Part D prescription drug plan that is not a part of your group’s coverage, the Medicare program may end your enrollment in your group’s Medicare Advantage plan. This applies to group Medicare Advantage plans only, not to group Medigap or supplemental plans.