ArcaMax

Hello Toni,

I delayed enrolling in Medicare Part B because I was working with employer benefits. Recently I turned 70 and am retiring effective Jan. 1. I have enrolled in a Medicare Supplement Plan G and Part D prescription drug plan that also begin Jan. 1.

Now my Medicare stress has started, because I have received a notice from the Centers for Medicare and & Medicaid Services (CMS) saying they do not have a record of me having prescription drug coverage that “met Medicare’s minimum standards” from March 1, 2019, when I turned 65, to Jan. 1, 2026, when I retired, and I may receive a Part D Late Enrollment Penalty (LEP).

I thought applying for Part B with the form from my employer kept me from this Part D penalty. Can you please advise me what to do to keep from making a mistake? Thank you, Toni.

—Zach from Houston, Texas

Hi Zach:

Many Americans retiring after 65 and leaving their employer health insurance plan are discovering that they have to prove they had “creditable drug coverage” when enrolling in their new Medicare Part D prescription drug plan.

Zach, enrolling properly in Medicare Part B does not prove that your employer’s group prescription drug plan was creditable. According to the 2026 Medicare & You handbook on page 84, there are three ways to avoid paying a penalty:

1. Get Medicare drug coverage (Part D) when you’re first eligible for it. “Even if you don’t take drugs now, you should consider joining a separate Medicare drug plan or a Medicare Advantage Plan with drug coverage to avoid a penalty,” it advises.

2. Add Medicare drug coverage (Part D) if you lose other creditable coverage. “Creditable prescription drug coverage could include drug coverage from a current or former employer or union, TRICARE, Indian Health Service, the Department of Veterans Affairs (VA). Your plan must tell you each year if your non-Medicare drug coverage is creditable coverage. If you go 63 days or more in a row without Medicare drug coverage or other creditable prescription drug coverage, you may have to pay a penalty if you sign up for Medicare drug coverage later.”

3. Keep records showing when you had other creditable prescription drug coverage and tell your plan when they ask about it. “If you don’t tell your Part D plan about your previous creditable prescription drug coverage, you may have to pay a penalty for as long as you have Medicare drug coverage.”

Creditable drug coverage should “meet or exceed” Medicare’s Part D plan minimum. The minimum deductible for 2026 should not exceed $615. The benefit amount should be unlimited, so if your plan has a coverage limit or cap, it is not creditable.

Discount prescription drug programs from Walmart, Kroger, GoodRx, Amazon Pharmacy or your local pharmacy do not count as creditable coverage.

Medicare can impose the late enrollment penalty (LEP) if:

—Your company prescription drug benefits are not considered creditable, as determined by Medicare.

—You fail to call and confirm that your company prescription drug benefits were creditable, if requested via correspondence from your Part D plan. Zach, this is your Part D situation. Don’t fail to confirm!

—You had no creditable coverage and never enrolled in Medicare Part D when you were first eligible.

If you wait longer than 63 days without creditable prescription drug coverage when leaving company benefits and are older than 65 years and 90 days old, you may receive a late enrollment penalty. For 2026 the penalty is 1% of the national Part D average or $.39 for each month back to the month your Part A began, not from when your Part B begins.

Remember, with Medicare what you don’t know WILL hurt you! Toni’s new course, a downloadable video series called the “Confused about Medicare Workshop,” and the “Medicare Survival Guide Advanced” edition are available at www.tonisays.com. (Chapter 5 of “Medicare Survival Guide Advanced” edition explains Medicare Part D and how to avoid Part D penalties.) Email info@tonisays.com or call 832-519-8664 with any questions.

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Toni King is an author and columnist on Medicare, Social Security and long-term care issues. She has spent nearly 30 years as a top sales leader in the field. If you have a Medicare question, email info@tonisays.com or call 832-519-8664. Sign up for the Toni Says newsletter at www.tonisays.com to keep up to date on Medicare changes.

©2026 Toni King. Distributed by Tribune Content Agency, LLC.

Copyright 2026 Toni King, Distributed by Counterpoint Media