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Creditable Coverage: Prescription Drug Notice
November 6, 2007, Volume 54, No. 11

Statement Date: November 6, 2007

Medicare requires all employers who offer group health plans with prescription drug coverage to provide this standard notice to employees, retirees and their dependents. 

Generally, you become eligible for Medicare coverage when you retire and reach age 65 or when you are disabled and receiving Social Security Disability Income (SSDI) for at least 24 months.  This notice is written for those who are age 65 or are disabled and are enrolled in one of Penn’s retiree medical plans.

Important Notice from the University of Pennsylvania about
Your Prescription Drug Coverage and Medicare

Please read this notice carefully and keep it where you can find it.  This notice has information about your current prescription drug coverage with the University of Pennsylvania and about your options under Medicare’s prescription drug coverage.  This information can help you decide whether or not you want to join a Medicare drug plan.  Information about where you can get help to make decisions about your prescription drug coverage is at the end of this notice.

1. Medicare prescription drug coverage became available in 2006 to everyone with Medicare.  You can get this coverage if you join a Medicare Prescription Drug Plan or join a Medicare Advantage HMO or PPO Plan that offers prescription drug coverage.  All Medicare drug plans provide at least a standard level of coverage set by Medicare.  Some plans may also offer more coverage for a higher monthly premium. 

2. The University of Pennsylvania has determined that the prescription drug coverage offered by the University of Pennsylvania Retiree Health Plan is, on average for all plan participants, expected to pay out as much as standard Medicare prescription drug coverage pays and is considered Creditable Coverage.

Because your existing coverage is, on average, at least as good as standard Medicare prescription drug coverage, you can keep this coverage and not pay a higher premium (a penalty) if you later decide to join a Medicare drug plan.

You can enroll in a Medicare prescription when you first become eligible for Medicare and each year from November 15th through December 31st.

If you lose creditable prescription drug coverage through no fault of your own, you will be eligible for a sixty (60) day Special Enrollment Period (SEP).

You should compare your current coverage, including which drugs are covered at what cost, with the coverage and costs of the plans offering Medicare prescription drug coverage in your area. 

If you do decide to enroll in a Medicare drug plan and waive your Penn prescription drug coverage, be aware that you and your dependents will not be able to enroll in the company sponsored prescription plan in the future unless Medicare’s change in policy adversely affects your coverage.

If you lose or waive your University of Pennsylvania-sponsored prescription drug coverage, you will be eligible to join a Medicare Part D prescription plan at that time using an Employer Group Special Enrollment Period.

You should also know that if you drop or lose your coverage with the University of Pennsylvania and don’t join a Medicare drug plan within 63 continuous days after your current coverage ends, you may pay a higher premium (a penalty) to join a Medicare drug plan later.

If you go 63 continuous days or longer without prescription drug coverage that’s at least as good as Medicare’s prescription drug coverage, your monthly premium may go up by at least 1% of the base beneficiary premium per month for every month that you did not have that coverage.  For example, if you go 19 months without coverage, your premium may consistently be at least 19% higher than the base beneficiary premium.  You may have to pay this higher premium (a penalty) as long as you have Medicare prescription drug coverage.  In addition, you may have to wait until the following November to join.

For more information about this notice or your current prescription drug coverage:

Contact Retiree Assist at 1-866-789-7366 for further information.

Note: You will receive this notice each year.  You will also get it before the next period you can join a Medicare drug plan, and if this coverage through the University of Pennsylvania changes.  You also may request a copy.

For more information about your options under Medicare prescription drug coverage:

More detailed information about Medicare plans that offer prescription drug coverage is in the “Medicare & You” handbook.  You’ll get a copy of the handbook in the mail every year from Medicare. You may also be contacted directly by Medicare drug plans.

For more information about Medicare prescription drug coverage:

• Visit www.medicare.gov

• Call your State Health Insurance Assistance Program (see the inside back cover of your copy of the “Medicare & You” handbook for their telephone number) for personalized help,

• Call 1-800-MEDICARE (1-800-633-4227). TTY users: call 1-877-486-2048.

For people with limited income and resources, extra help paying for Medicare prescription drug coverage is available. For information about this extra help, visit Social Security on the web at www.socialsecurity.gov, or call them at 1-800-772-1213 (TTY 1-800-325-0778).

Remember:  Keep this Creditable Coverage notice. If you decide to join one of the Medicare drug plans, you may be required to provide a copy of this notice when you join to show whether or not you have maintained creditable coverage and whether or not you are required to pay a higher premium (a penalty).

­—Division of Human Resources



Almanac - November 6, 2007, Volume 54, No. 11