Hello Toni: When I turned 65, I continued to work with excellent company benefits. I delayed enrolling in Part B for 5 years, after I turned 70, and retired with a Jan. 1 effective date for my Medicare Supplement Plan G and Part D prescription drug plan.

Now my Medicare stress has started, because I have received a notice from CMS saying they do not have record of me having prescription drug coverage that “met Medicare’s minimum standards” from March 1, 2019, when I turned 65 to Jan. 1, 2025, when I retired, and I may receive a Part D late enrollment penalty.

I thought applying for Part B with that form from my employer attached kept me from a Part D penalty. Can you please advise me what to do? I want to be sure that I do not make a mistake. Thank you, Toni. — Zach, Lake Jackson, Texas

Hi Zach: Many Americans who retire after 65, leaving employer group health plans, apply for Medicare benefits and discover that they now may need to prove they had “creditable drug coverage” for a Medicare Part D prescription drug plan.

Zach, enrolling in Medicare Part B properly does not prove that your employer’s group prescription drug plan was creditable. The Medicare & You handbook states:
Creditable prescription drug coverage could include drug coverage from a current or former employer or union, TRICARE, Indian Health Service, the Department of Veterans Affairs or individual health insurance coverage. Your plan must tell you each year if your non-Medicare drug coverage is creditable coverage. … Keep records showing when you had other creditable prescription drug coverage, and tell your plan when they ask about it. If you don’t tell your plan about your previous creditable prescription drug coverage, you may have to pay a penalty for as long as you have Medicare drug coverage.

The above paragraphs do not advise what creditable coverage is. To explore for more details on “creditable prescription drug coverage” visit www.medicare.gov or email info@tonisays.com with your Medicare questions.

Creditable drug coverage should “meet or exceed” Medicare’s Part D plan minimums. The minimum deductible for 2025, as an example, should at least be $590 or less (this amount changes every year) with a maximum out-of-pocket. The benefit amount should be unlimited, so if your plan has a coverage limit or cap, it is not creditable. Unlimited prescription drug coverage is the key.

Medicare does not regard discount prescription drug programs from Walmart, Kroger, GoodRx, Amazon pharmacy or your local pharmacy that offer low-cost generics as “creditable coverage.” If you believe these plans can keep you from the Late Enrollment Penalty,  I need to tell you that you’re wrong! According to CMS (Centers for Medicare and Medicaid Services), these types of prescription drug programs are not creditable.

For Veterans using the VA for prescriptions, I have good news for you — Medicare does consider the VA pharmacy to be creditable coverage.

Medicare can impose the Late Enrollment Penalty can be because:
— Your company prescription drug benefits are not considered creditable as Medicare declares.
— You fail to call and confirm that your company prescription drug benefits were creditable, if requested via correspondence from your Part D plan.
— You had no creditable coverage and never enrolled in Medicare Part D when you were first eligible.

If you wait longer than 63 days without creditable prescription drug coverage when leaving company benefits and are older than 65 years and 90 days old, you may be assessed a LEP which is 1% for each month back to the month your Part A began, not from when your Part B begins. (Chapter 5 of my Medicare Survival Guide Advanced edition explains Medicare Part D and how to avoid Part D penalties).

Zach, you need to find the record from your previous (employer) plan showing that your prescription drug coverage was “creditable” and submit it to your plan.

Readers, with Medicare, what you don’t know will hurt you.

Toni King is an author and columnist on Medicare and health insurance issues. She has spent nearly 30 years as a top sales leader in the field. If you have a Medicare question, email info@tonisays.com or call 832-519-8664. The “Medicare Survival Guide Advanced” edition and her new “Confused about Medicare” video series are available at www.tonisays.com.