You decide whether or not to enroll in a Part D plan. If you do, you must pay a premium every month, which gives you access to benefits.
You pay the late enrollment penalty for the rest of your life, as long as you’re covered by a Part D plan. As the national basic premium changes from year to year, so will the dollar amount of your late enrollment penalty.
You can avoid late enrollment penalty with creditable coverage
To avoid the late enrollment penalty, you must have creditable prescription drug coverage.
Creditable coverage is prescription drug coverage that expects to pay at least as much or more than Medicare's standard prescription drug plan. The coverage may be provided through
- a Medicare prescription drug plan
- an employer plan
- another source, such as the Veterans Administration (VA) or TRICARE
If you are eligible for Medicare and still working, you may be covered by your employer's plan.
NRECA's employee prescription drug coverage selected by co-ops for active employees and directors age 65 or older provides creditable coverage in most cases for these employees and directors, as well as their spouses and surviving spouses.
Since January 1, 2006, all participants eligible for Medicare Part D – retired or disabled employees or directors and their Medicare-eligible spouses or surviving spouses – are no longer covered by their co-op's NRECA prescription drug coverage for employees.
To avoid a late enrollment penalty, you must enroll in a Part D plan – from NRECA or another provider – when you become eligible for Medicare. The period in which you may enroll without a penalty varies depending upon why you are enrolling in a Part D plan.
If you do not sign up for a Part D plan when you are eligible for Medicare, you may enroll during the open enrollment period each year, from November 15 to December 31. Unless you had other creditable coverage for prescription drugs, you will pay a penalty for the months in which you were not covered.
NRECA checks for gaps in coverage when you enroll
When you enroll in a NRECA Part D plan, NRECA checks its database and the Medicare database to see if you have any gaps in coverage – periods of time when you were eligible for Medicare Part D, but not covered by a prescription drug plan.
If it looks like you have a gap in coverage, NRECA will send you a form, asking you if you had prescription drug coverage and the dates you were covered. Coverage from the Veterans Administration (VA), TRICARE and your spouse’s employer plan are common types of coverage that will not show up in the Medicare or NRECA databases.
NRECA is required to tell Medicare if there was a period of 63 or more consecutive days when you did not have creditable prescription drug coverage. Medicare calculates the late enrollment penalty and tells NRECA the amount to add to your monthly premium.
You will be contacted by NRECA if you have a gap in coverage and asked to complete a Creditable Coverage Attestation.