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Creditable Coverage Prescription Drug Notice
November 14, 2006, Volume 53, No. 12

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

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 the prescription drug coverage available for people with Medicare. It also explains the options you have under the Medicare prescription drug coverage and can help you decide whether or not you want to enroll. At the end of this notice is information about where you can get help to make decisions about your prescription drug coverage.

• Medicare’s prescription drug coverage became available in 2006 to everyone with Medicare through Medicare prescription drug plans and Medicare-Advantage Plans that offer prescription drug coverage. All Medicare prescription 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. 

• 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 the standard Medicare prescription drug coverage will pay and is considered Creditable Coverage.

Because your existing coverage is on average at least as good as the standard Medicare prescription drug coverage, you can keep this coverage and not pay extra if you later decide to enroll in Medicare’s prescription drug coverage.

Individuals can enroll in a Medicare prescription drug plan when they first become eligible for Medicare and each year from November 15 through December 31. Beneficiaries leaving employer/union coverage may be eligible for a Special Enrollment Period to sign up for a Medicare prescription drug plan.  You should compare your current coverage, including which drugs are covered, with the coverage and cost of the plans offering Medicare prescription drug coverage in your area.  If you decide to enroll in a Medicare prescription drug plan and drop your University of Pennsylvania prescription drug coverage, be aware that you and your dependents cannot get this coverage back.

Please contact Retiree Assist (the University’s retiree medical administrator) at 1-866-789-7366 for more information about what happens to your coverage if you enroll in a Medicare prescription drug plan.

You should also know that if you drop or lose your coverage with the University of Pennsylvania and don’t enroll in Medicare prescription drug coverage after your current coverage ends, you may pay more (a penalty) to enroll in Medicare’s prescription drug coverage later.

If you go 63 days or longer without prescription drug coverage that’s at least as good as Medicare’s prescription drug coverage, your monthly premium will go up at least 1% per month for every month that you did not have that coverage. For example, if you go nineteen months without coverage, your premium will always be at least 19% higher than what many other people pay. You’ll have to pay this higher premium as long as you have Medicare prescription drug coverage.  In addition, you may have to wait until the following November to enroll.

NOTE: You will receive this notice annually and at other times in the future such as before the next period you can enroll in Medicare prescription drug coverage, and if this coverage through the University of Pennsylvania changes.  You also may request a copy of this notice.

For more information about your options under Medicare’s 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 prescription drug plans. For more information about Medicare prescription drug plans:

• Visit www.medicare.gov.

• Call your State Health Insurance Assistance Program (see your copy of the Medicare & You handbook for their telephone number) for personalized help.

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

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

Remember to keep this notice. If you enroll in one of the new plans approved by Medicare which offer prescription drug coverage, you may be required to provide a copy of this notice when you join to show that you are not required to pay a higher premium amount. 

—Division of Human Resources

Almanac - November 14, 2006, Volume 53, No. 12