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Creditable Coverage
Health coverage that meets minimum standards, preventing late enrollment penalties in Medicare.
Full Definition
Creditable coverage is health insurance that meets or exceeds Medicare's benefit standards. Having creditable coverage while you're eligible for Medicare Part B or Part D allows you to delay enrolling without incurring a late enrollment penalty. Common creditable coverage sources include employer-sponsored insurance, union plans, and some retiree health plans. When your creditable coverage ends, you typically have a special enrollment period to sign up for Medicare without penalty.
Real-World Example
You turn 65 but continue working with employer health insurance. Your employer plan qualifies as creditable coverage. You delay Medicare Part B enrollment for 5 years. When you retire, you enroll in Part B during a special enrollment period with no penalty.
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