What To Do If The $2,000 Cap Jeopardizes Your Employer Drug Coverage

The Inflation Reduction Act has generated many initiatives to cut drug costs for Medicare beneficiaries. So, it’s possible that those past the age of 65 and still working probably don’t care about any of them. However, the IRA may have created a dilemma. Will the drug coverage incorporated into the employer group health plan still be considered creditable?

Creditable Drug Coverage and Employer Plans

Creditable means that the employer plan is expected to pay on average as much as the standard Medicare prescription drug plan. The Centers for Medicare and Medicaid Services has formulas and criteria for determining creditable coverage. If the employer coverage is creditable, the employees with that coverage can delay enrollment in a Part D Medicare drug plan until retirement. There is a special enrollment period to sign up for a Part D stand-alone plan or a Medicare Advantage plan with prescription drug coverage, also known as an MA-PD plan. And there would be no penalties.