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I have Medicare and get drug coverage from a current or former employer or union

If you apply and qualify for extra help

 Medicare helps employers and unions continue to offer high quality prescription drug coverage. Before you make a decision about whether to join a Medicare drug plan, it’s important for you to understand how your employer or union drug coverage works with Medicare. Your employer or union drug coverage may change if you join a Medicare drug plan. You should get information from your employer or union (or the plan that administers your drug coverage) annually about how your drug coverage compares to Medicare prescription drug coverage (whether it is creditable drug coverage). Read carefully and save all materials from your employer or union. They will help you understand your options and make your decision much easier.

Here are some important questions to answer before making a decision:
  • Is your employer or union drug coverage creditable (on average, does it expect to pay at least as much as standard Medicare prescription drug coverage)? If not, in most cases, you will have to pay a late enrollment penalty if you don’t join a Medicare drug plan when you are first eligible.
  • Will you or your spouse or dependents lose all of your employer or union coverage if you join a Medicare drug plan?
  • How do your out-of-pocket drug costs with your employer or union drug coverage compare to your out-of-pocket drug costs with a Medicare drug plan?
  • If you qualify for extra help with your Medicare drug plan costs, how does this change how your costs compare?


Your (or your spouse’s) employer or union tells you that your current coverage IS creditable prescription drug coverage.
  • You can keep this coverage as long as it is still offered by your employer or union.
  • You won’t have to pay a late enrollment penalty if your employer or union stops offering prescription drug coverage as long as you join a Medicare drug plan within 63 days after the coverage ends.


Note: You should keep any materials your employer or union sends you that tell you your prescription drug coverage is creditable. You may need to provide it to your Medicare drug plan as proof of creditable prescription drug coverage if you decide to join a Medicare drug plan later.

Your (or your spouse’s) employer or union tells you that your current coverage ISN’T creditable prescription drug coverage. If you want to join a Medicare drug plan, you must join when you are first eligible to avoid a late enrollment penalty. Caution: If you drop your employer or union coverage, you may not be able to get it back. You also may not be able to drop your employer or union drug coverage without also dropping your employer or union health coverage. If you drop coverage for yourself, you may also have to drop coverage for your spouse and dependents.

Find out about your options from your benefits administrator. You may be able to do one of the following:
  • Keep your current employer or union drug coverage and join a Medicare drug plan to give you more complete prescription drug coverage.
  • Keep only your current employer or union drug coverage. If you join a Medicare drug plan later, you may have to pay a late enrollment penalty.
  • Drop your current coverage and join a Medicare Prescription Drug Plan, or join a Medicare Health Plan that covers prescription drugs.
Tip: Talk with your employer or union benefits administrator before making any changes to your health care coverage.



(Primary Source: Centers for Medicare and Medicaid Services - Your Guide to Medicare Prescription Drug Coverage 2008. This content may have been enhanced by Q1Group LLC to include further examples, explanations, and links.)


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    "We do not offer every plan available in your area. Any information we provide is limited to those plans we do offer in your area. Please contact Medicare.gov or 1-800-MEDICARE to get information on all of your options."
  • When enrolling in a Medicare Advantage plan, you must continue to pay your Medicare Part B premium.
  • Medicare beneficiaries with higher incomes may be required to pay both a Medicare Part B and Medicare Part D Income Related Monthly Adjustment Amount (IRMAA). Read more on IRMAA.
  • Medicare Advantage plans that include prescription drug coverage (MAPDs) are considered Medicare Part D plans and members with higher incomes may be subject to the Medicare Part D Income Related Monthly Adjustment Amount (IRMAA), just as members in stand-alone Part D plans. In certain situations, you can appeal IRMAA.
  • You must be enrolled in both Medicare Part A and Part B to enroll in a Medicare Advantage plan. Members may enroll in a Medicare Advantage plan only during specific times of the year. Contact the Medicare plan for more information.
  • If you are enrolled in a Medicare plan with Part D prescription drug coverage, you may be eligible for financial Extra Help to assist with the payment of your prescription drug premiums and drug purchases. To see if you qualify for Extra Help, call: 1-800-MEDICARE (1-800-633-4227). TTY users should call 1-877-486-2048, 24 hours a day/ 7 days a week or consult www.medicare.gov; the Social Security Office at 1-800-772-1213 between 7 a.m. and 7 p.m., Monday through Friday. TTY users should call, 1-800-325-0778; or your state Medicaid Office.
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  • Disclaimer for Chronic Condition Special Needs Plan (SNP): This plan is available to anyone with Medicare who has been diagnosed with the plan specific Chronic Condition.
  • Medicare MSA Plans combine a high deductible Medicare Advantage Plan and a trust or custodial savings account (as defined and/or approved by the IRS). The plan deposits money from Medicare into the account. You can use this money to pay for your health care costs, but only Medicare-covered expenses count toward your deductible. The amount deposited is usually less than your deductible amount, so you generally have to pay out-of-pocket before your coverage begins.
  • Medicare MSA Plans do not cover prescription drugs. If you join a Medicare MSA Plan, you can also join any separate (stand-alone) Medicare Part D prescription drug plan
  • There are additional restrictions to join an MSA plan, and enrollment is generally for a full calendar year unless you meet certain exceptions. Those who disenroll during the calendar year will owe a portion of the account deposit back to the plan. Contact the plan provider for additional information.
  • Medicare beneficiaries may enroll through the CMS Medicare Online Enrollment Center located at www.medicare.gov.
  • Medicare beneficiaries can file a complaint with the Centers for Medicare & Medicaid Services by calling 1-800-MEDICARE 24 hours a day/7 days or using the medicare.gov site. Beneficiaries can appoint a representative by submitting CMS Form-1696.
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