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The Medicare Part D Late Enrollment Penalty (LEP) is one of the most consequential and least understood Medicare cost penalties. Established by the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA 2003, Public Law 108-173) and codified at Section 1860D-13(b) of the Social Security Act (42 USC 1395w-113), the LEP applies to Medicare beneficiaries who do not enroll in a Part D plan or maintain creditable prescription drug coverage when first eligible. The penalty equals 1 percent of the national base beneficiary premium for each full month the beneficiary went without creditable coverage, added to the monthly Part D premium permanently for the beneficiary's life. For 2026, the national base beneficiary premium is approximately $38.99 per month. A beneficiary who went 24 months without creditable coverage faces a permanent 24 percent penalty: $9.36 per month added to Part D premium forever. Over 10 years, that adds up to $1,123.20 in additional premium cost. Over a 20-year retirement, the penalty cost can exceed $2,000. The mechanism designed to avoid the LEP is "creditable coverage" certification under Section 1860D-13(b)(4) and 42 CFR 423.56. Creditable coverage is prescription drug coverage from sources other than Part D that is "actuarially equivalent or better" to standard Part D coverage. Common sources include employer and union group health plans (active or retiree), TRICARE for Life (military retiree), the Federal Employees Health Benefits Program (FEHB), Veterans Affairs prescription drug coverage, the Indian Health Service, and certain pre-Medicare individual market plans. Coverage entities are required by 42 CFR 423.56 to provide annual creditable coverage notices to enrollees by October 15 each year. Beneficiaries should retain these notices as proof of creditable coverage. When the beneficiary eventually enrolls in Part D, they demonstrate creditable coverage during any deferral period by providing the notices, avoiding the LEP entirely. For Georgia families, this guide explains the federal framework, what counts as creditable coverage, the certification and annual notice process, the LEP calculation methodology, how to dispute an LEP determination, the Special Enrollment Period after loss of creditable coverage, and worked examples for typical Georgia beneficiaries who deferred Part D enrollment through employer, retiree, military, veterans, or federal employee coverage. :::
::: callout Key takeaways for Georgia Medicare creditable coverage
- The Medicare Part D Late Enrollment Penalty (LEP) is codified at Section 1860D-13(b) of the Social Security Act and 42 CFR 423.46.
- The LEP equals 1 percent of the national base beneficiary premium (approximately $38.99 in 2026) per full month without creditable coverage, added permanently to the Part D premium.
- Creditable coverage under Section 1860D-13(b)(4) and 42 CFR 423.56 is prescription drug coverage that is "actuarially equivalent or better" to standard Part D.
- Common creditable coverage sources: employer and union health plans, TRICARE for Life, FEHB, VA, IHS, Georgia State Health Benefit Plan retiree coverage, and certain pre-65 individual market plans.
- Non-creditable sources include prescription discount cards (Costco, RxSpark, GoodRx), manufacturer copay coupons, and charitable assistance programs.
- Coverage entities must provide an annual creditable coverage notice by October 15 each year under 42 CFR 423.56.
- Beneficiaries should retain creditable coverage notices each year for proof when enrolling in Part D.
- Loss of creditable coverage triggers a 63-day Special Enrollment Period to enroll in Part D without LEP.
- LEP determinations can be disputed through the standard Medicare 5-level appeals process.
- GeorgiaCares (SHIP) at 1-866-552-4464 provides free counseling on creditable coverage and LEP disputes. :::
The Medicare Part D Late Enrollment Penalty
The Medicare Part D Late Enrollment Penalty is the financial mechanism that encourages Medicare beneficiaries to enroll in Part D when first eligible. Without the LEP, beneficiaries might delay Part D enrollment until they need expensive medications, creating adverse selection in the Part D program. Congress designed the LEP to spread risk across all beneficiaries by encouraging early enrollment.
The LEP was established by the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA 2003, Public Law 108-173), which created Medicare Part D as part of a comprehensive Medicare reform. Section 1860D-13(b) of the Social Security Act codifies the penalty. The implementing regulation is 42 CFR 423.46.
The LEP calculation is straightforward. For each full month a beneficiary went without creditable prescription drug coverage after their Part D Initial Enrollment Period ended, 1 percent of the national base beneficiary premium is added to the beneficiary's Part D premium. The penalty is permanent: it applies for the rest of the beneficiary's life. The percentage is fixed (set at the time of enrollment based on the gap period), but the dollar amount adjusts annually as the national base beneficiary premium changes.
For 2026, the national base beneficiary premium is approximately $38.99 per month. A beneficiary with a 12-month gap pays an LEP of 12 percent × $38.99 = $4.68 per month. A 24-month gap means $9.36 per month. A 36-month gap means $14.04 per month. A 60-month gap means $23.39 per month. A 120-month gap (10 years) means $46.79 per month, more than doubling the typical Part D plan premium.
The LEP is permanent. Once assessed, it remains for the beneficiary's life. The only way to avoid the LEP entirely is to demonstrate creditable coverage during the gap period. The only way to reduce the LEP is to provide creditable coverage notices for some portion of the gap period (which reduces the gap that counts toward the penalty).
Creditable coverage: the avoidance mechanism
Section 1860D-13(b)(4) of the Social Security Act provides the legal basis for the creditable coverage exception. Periods during which the beneficiary had creditable prescription drug coverage do not count toward the LEP gap. If the beneficiary had continuous creditable coverage from the end of their Initial Enrollment Period through the date of Part D enrollment, the LEP is zero.
The regulatory definition of creditable coverage is at 42 CFR 423.56. Creditable coverage means prescription drug coverage that is "actuarially equivalent or better" to standard Part D coverage. The determination is made by the coverage entity's actuaries based on CMS-specified criteria. The criteria evaluate factors such as deductible, cost-sharing structure, formulary coverage, and out-of-pocket limit.
Most large employer health plans satisfy the creditable coverage standard. The employer's plan must include prescription drug coverage that is at least as generous as standard Part D. For active employees, the plan's drug coverage typically far exceeds Part D minimums, easily meeting the standard. For retiree plans, the coverage may be more limited but typically still meets the actuarial equivalent threshold.
Federal coverage sources (TRICARE for Life, FEHB, VA, IHS) are generally creditable. The federal agencies certify creditable status and make this widely known to beneficiaries. Pre-65 individual market plans (ACA marketplace plans) are typically creditable for the pre-Medicare period, but coverage status after Medicare eligibility depends on whether the plan continues and is acceptable as creditable coverage.
What is NOT creditable coverage: prescription discount cards (Costco, RxSpark, GoodRx, Blink Health), manufacturer copay coupons (drug-company-specific savings programs), charitable assistance programs (Patient Access Network Foundation, HealthWell Foundation), medication therapy management programs, and limited-benefit insurance (cancer-only, accident-only). These programs may reduce drug costs but they are not creditable for LEP avoidance.
Sources of creditable coverage in Georgia
Georgia residents have multiple potential sources of creditable coverage. Understanding each source helps beneficiaries assess their options.
Employer and union group health plans: Active employer health plans and union health plans almost always include creditable prescription drug coverage. Annual notices are typically distributed in fall (before the October 15 Annual Enrollment Period for Part D). Beneficiaries working past 65 with employer coverage typically defer Part D enrollment without penalty.
Retiree health plans: Many former employers continue prescription drug coverage for retirees. The retiree plan may be the same as the active employee plan or a separate retiree-only plan. Creditable status varies by plan; check the annual notice. Common Georgia retiree plans include the Georgia State Health Benefit Plan (SHBP) for state employees, Atlanta Public Schools retiree plan, and various Fortune 500 retiree plans for employees of companies headquartered in or with major operations in Georgia (Delta Air Lines, Coca-Cola, Home Depot, UPS, AT&T).
TRICARE for Life: Military retirees and their dependents may have TRICARE for Life coverage. TRICARE for Life is creditable. Beneficiaries should retain their TRICARE enrollment documentation. The TRICARE for Life information line is 1-866-773-0404.
Federal Employees Health Benefits Program (FEHB): Federal employee and retiree health plans are administered by the Office of Personnel Management (OPM). Most FEHB plans include creditable prescription drug coverage. Federal retirees in Georgia typically enroll in Blue Cross Blue Shield Federal Employee Program (BCBS FEP), GEHA, or other FEHB carriers. OPM contact: 202-606-1800.
Veterans Affairs (VA) prescription drug coverage: Veterans enrolled in VA health care can receive prescriptions through VA pharmacies. VA coverage is creditable for enrolled veterans. Georgia VA Medical Centers: VA Atlanta (1-404-321-6111), VA Augusta (1-706-733-0188), VA Decatur (1-404-728-7714), VA Dublin (1-478-272-1210). Veterans may enroll in Part D in addition to VA coverage to use non-VA pharmacies.
Indian Health Service (IHS): IHS-eligible Medicare beneficiaries (American Indian/Alaska Native) have creditable coverage through IHS. Few Georgia residents are IHS-eligible, but those who are have creditable coverage.
Pre-65 individual market plans: Beneficiaries on ACA marketplace plans pre-65 typically have creditable coverage for the pre-Medicare period. After Medicare eligibility (age 65), the marketplace plan may continue but is not generally creditable for Medicare purposes; beneficiary should transition to Medicare-compatible coverage.
COBRA continuation coverage: COBRA from former employer may be creditable if the underlying plan was creditable. Beneficiaries on COBRA should obtain creditable coverage notices each year. COBRA continuation is limited to 18 months for most circumstances.
Annual creditable coverage notices (42 CFR 423.56)
Coverage entities (employers, insurers, federal agencies, unions) are required by 42 CFR 423.56 to provide annual creditable coverage notices to all enrollees by October 15 each year. The October 15 deadline aligns with the Medicare Annual Enrollment Period (October 15 to December 7), giving beneficiaries time to consider whether to enroll in Part D based on their current creditable coverage status.
The annual notice must include:
- Plan name and coverage period
- Determination of creditable or non-creditable status
- Implications of non-creditable status for Medicare Part D
- Contact information for questions about the determination
- Standard language specified by CMS
The notice is typically delivered by mail or electronically. Beneficiaries should:
- Receive the notice each year before October 15
- Review the creditable status
- Retain the notice in their files
- Contact the coverage entity if a notice is missing
The notice is critical evidence when the beneficiary eventually enrolls in Part D. Without the notice, the beneficiary may struggle to prove creditable coverage and may face LEP for gap periods.
What happens when creditable coverage ends
Loss of creditable coverage triggers a Special Enrollment Period (SEP) for Part D enrollment. Under 42 CFR 423.64, the beneficiary has 63 days from the date of loss of creditable coverage to enroll in a Part D plan without LEP.
Common scenarios triggering loss of creditable coverage:
- Retirement (loss of active employer plan)
- COBRA exhaustion (typically 18 months after retirement)
- Plan termination (employer cancels coverage)
- Employer changes plan to non-creditable
- Beneficiary moves and loses access to current plan
- Spouse's employer plan ends due to spouse's retirement
When loss of creditable coverage occurs, the beneficiary should:
- Receive notice of loss from the coverage entity (typically required)
- Identify a Part D plan to enroll in
- Enroll within 63 days of loss
- Provide proof of prior creditable coverage to avoid LEP
If the beneficiary delays beyond 63 days, the LEP clock begins running. Each full month without creditable coverage adds 1 percent to the future LEP.
The LEP calculation in detail
The LEP is calculated when the beneficiary first enrolls in a Part D plan. The plan reviews the beneficiary's enrollment history and prior coverage. The plan calculates the gap period (months between end of Initial Enrollment Period and current Part D enrollment, less any periods with creditable coverage).
The formula: Monthly LEP = (Gap months) × 1 percent × (National base beneficiary premium)
For 2026, the national base beneficiary premium is approximately $38.99. Examples:
- 6-month gap: 6 percent × $38.99 = $2.34/month
- 12-month gap: 12 percent × $38.99 = $4.68/month
- 18-month gap: 18 percent × $38.99 = $7.02/month
- 24-month gap: 24 percent × $38.99 = $9.36/month
- 30-month gap: 30 percent × $38.99 = $11.70/month
- 36-month gap: 36 percent × $38.99 = $14.04/month
- 48-month gap: 48 percent × $38.99 = $18.72/month
- 60-month gap: 60 percent × $38.99 = $23.39/month
- 84-month gap: 84 percent × $38.99 = $32.75/month
- 120-month gap: 120 percent × $38.99 = $46.79/month
The percentage is fixed at the time of enrollment. The dollar amount adjusts annually as the national base beneficiary premium changes (typically a small increase each year tied to Medicare cost trends).
The LEP is added to the beneficiary's monthly Part D plan premium. The plan submits the total premium (base plan + LEP) to CMS for billing. The beneficiary pays the total either through Social Security premium withholding (for most beneficiaries) or direct payment to the plan.
How to dispute an LEP
The LEP can be disputed through the standard Medicare 5-level appeals process. The most common dispute scenarios:
- Beneficiary had creditable coverage but did not initially provide documentation
- Beneficiary's prior coverage was determined creditable retroactively
- Beneficiary qualified for SEP but plan failed to apply
- Calculation error in months of gap
The dispute process:
- Level 1: Plan reconsideration. The beneficiary submits creditable coverage notices and other documentation. The plan recalculates the LEP based on the new information. Most disputes are resolved here.
- Level 2: Independent Review Entity (Maximus Federal Services at 1-833-919-0198). If the plan upholds the LEP at Level 1, the case is forwarded to the IRE for independent review.
- Level 3: ALJ hearing through OMHA (1-855-556-8475). The case can advance to ALJ if the amount in controversy meets the minimum threshold (which most LEP disputes do not, since LEP is monthly, though aggregating multiple monthly charges over time may meet it).
- Level 4: Medicare Appeals Council
- Level 5: Federal district court
Most LEP disputes are resolved at Level 1 or Level 2 by providing additional documentation. The key is retaining annual creditable coverage notices and submitting them when challenging the LEP.
GeorgiaCares (1-866-552-4464) provides free counseling on LEP disputes. Atlanta Legal Aid (404-377-0701) and Georgia Legal Services Program (1-800-498-9469) provide free legal representation for low-income beneficiaries.
Worked example 1: Margaret 67 Atlanta deferred Part D + employer coverage
Margaret is a 67-year-old Atlanta resident. She turned 65 in March 2024 but continued working full-time at Emory Healthcare. Her employer health plan (Aetna employer plan administered through Emory) includes prescription drug coverage. The Aetna plan provides Margaret with annual creditable coverage notices each October. Margaret retained the notices for 2024 and 2025.
Margaret continues working through September 2026, then retires at age 67. Her employer health plan ends September 30, 2026. The plan provides Margaret with a loss-of-coverage notice. The 63-day SEP for Part D enrollment runs October 1, 2026 through December 2, 2026.
Margaret enrolls in a Humana Part D plan effective November 1, 2026. She submits her creditable coverage notices for 2024 and 2025, plus documentation of continuous employer coverage from March 2024 (Medicare eligibility) through September 2026 (retirement).
Humana reviews the documentation. Continuous creditable coverage from March 2024 through September 30, 2026: confirmed. No gap period for LEP calculation. LEP: $0.
Margaret pays only the standard Humana Part D plan premium going forward. No permanent penalty.
This worked example illustrates the most common scenario: a beneficiary works past 65 with employer coverage, then enrolls in Part D at retirement through the SEP. With creditable coverage notices retained, no LEP applies.
Worked example 2: Robert 70 Savannah TRICARE for Life
Robert is a 70-year-old retired Navy veteran living in Savannah. He turned 65 in 2020. As a military retiree, he was automatically enrolled in TRICARE for Life when he became Medicare-eligible. TRICARE for Life is creditable coverage.
Robert uses TRICARE pharmacies for his prescriptions. His prescriptions include lisinopril for blood pressure, atorvastatin for cholesterol, and metformin for type 2 diabetes. TRICARE for Life covers all three with low copays.
Robert has not enrolled in Part D and does not plan to. TRICARE for Life provides sufficient prescription coverage for his needs.
If Robert later decided to enroll in Part D (perhaps for a particular drug not well-covered by TRICARE), he would submit TRICARE for Life documentation. The 6-year period from 2020 to 2026 would count as creditable coverage, with no LEP.
Robert's case illustrates that TRICARE for Life is sufficient as creditable coverage. Veterans on TRICARE for Life do not need Part D enrollment to avoid LEP.
Worked example 3: Linda 68 Macon VA prescription coverage
Linda is a 68-year-old Navy veteran living in Macon. She turned 65 in 2023 and enrolled in VA health care at the VA Atlanta Medical Center. Her VA coverage is creditable.
Linda primarily uses the VA Atlanta pharmacy for her prescriptions. Her medications include lisinopril, atorvastatin, and a brand-name medication for chronic back pain. All are covered by VA with low or no copay.
In 2025, Linda's primary care doctor moves to a non-VA practice. Linda wants to fill prescriptions at her local CVS in Macon for convenience. The VA pharmacy can mail prescriptions to her but the wait time is longer than she prefers.
Linda enrolls in a Cigna Part D plan effective January 2026. She submits her VA enrollment documentation. The plan confirms VA creditable coverage from 2023 to 2026 (the gap period). No LEP applies.
Linda now has both VA coverage and Part D. She uses VA for some prescriptions and CVS for others. The Part D plan complements VA coverage.
Linda's case illustrates that VA-enrolled veterans can defer Part D enrollment without LEP, then enroll in Part D later for additional flexibility.
Worked example 4: Charles 72 Augusta FEHB retiree
Charles is a 72-year-old retired federal employee living in Augusta. He retired from the U.S. Postal Service in 2019 at age 65. He continues his Blue Cross Blue Shield Federal Employee Program (BCBS FEP) coverage in retirement. BCBS FEP is administered through the Federal Employees Health Benefits Program (FEHB) by the Office of Personnel Management.
BCBS FEP is creditable coverage. The plan provides Charles with annual creditable coverage notices each October. Charles retained the notices for 2019, 2020, 2021, 2022, 2023, 2024, and 2025.
In 2026, Charles considers enrolling in Part D for additional savings on certain prescriptions. He has BCBS FEP which covers most prescriptions well, but a few specialty drugs are more affordable through Part D.
Charles enrolls in a Humana Part D plan effective January 2026. He submits his BCBS FEP creditable coverage notices. The plan confirms continuous creditable coverage from 2019 to 2026 (7 years). No LEP applies.
Charles now has both BCBS FEP and Part D. He coordinates coverage to optimize his prescription costs.
This worked example illustrates that FEHB plans (BCBS FEP, GEHA, Aetna FEP, others) are creditable coverage. Federal retirees with FEHB can defer Part D enrollment without LEP for as many years as they keep FEHB.
Worked example 5: Patricia 65 Columbus turning 65 with COBRA
Patricia is a 65-year-old Columbus resident. She lost her job in mid-2024 at age 64.5 and elected COBRA continuation coverage to maintain her employer health plan. COBRA continued through December 2025 (18 months from job loss). The underlying plan was creditable; the employer issued COBRA continuation creditable coverage notices.
Patricia turned 65 in December 2024 (her Initial Enrollment Period was September 2024 through March 2025). She deferred Part D enrollment because COBRA was active and creditable.
In December 2025, COBRA exhausted. Patricia received a notice of loss of creditable coverage. The 63-day SEP for Part D enrollment ran from January 1, 2026 through March 4, 2026.
Patricia enrolled in a UnitedHealthcare Part D plan effective January 1, 2026 (the day after COBRA ended). She submitted her COBRA creditable coverage notices for 2024 and 2025. The plan confirmed continuous creditable coverage. No LEP applied.
This worked example illustrates that COBRA continuation can serve as creditable coverage if the underlying plan was creditable. Beneficiaries on COBRA should:
- Confirm COBRA plan creditable status
- Obtain annual creditable coverage notices
- Plan for COBRA exhaustion (typically 18 months)
- Enroll in Part D within 63-day SEP after COBRA ends
Worked example 6: Henry 73 Athens LEP dispute
Henry is a 73-year-old Athens resident. He turned 65 in 2020 and retired from a private-sector employer. The former employer offered retiree health coverage. Henry believed the retiree plan was creditable but did not retain detailed documentation.
In 2026, Henry decides to enroll in Part D for additional prescription savings. He enrolls in an Anthem Medicare Advantage prescription drug plan effective January 2026. Anthem asks about prior coverage. Henry indicates he had retiree coverage but cannot produce specific creditable coverage notices.
Anthem initially calculates LEP based on a 36-month gap (the period from end of his IEP through January 2026 minus the months Henry can document creditable coverage). Initial LEP: 36 percent × $38.99 = $14.04 per month, permanent.
Henry contacts GeorgiaCares (1-866-552-4464) for help. The counselor advises him to contact his former employer's HR department and request creditable coverage documentation for the missing years. Henry contacts the employer's HR. The HR provides backdated creditable coverage notices for 2020, 2021, 2022, 2023.
Henry files a Level 1 reconsideration with Anthem. He submits the additional documentation. Anthem reconsiders. The 2020-2023 period is now confirmed creditable. Only 2024 and 2025 remain uncovered (24 months).
Updated LEP: 24 percent × $38.99 = $9.36 per month. Reduction of $4.68 per month, or $56.16 per year, or $561.60 over 10 years.
Henry continues to investigate the 2024 and 2025 period. He learns that he was still on the retiree plan during those years (he hadn't realized). He obtains additional documentation. Anthem reconsiders again. Total creditable coverage now confirmed for the full gap period.
Final LEP: $0. Annual savings versus initial determination: $168.48 (12 months × $14.04). Lifetime savings: substantial.
This worked example illustrates the importance of retaining documentation and the value of disputes when documentation is missing. GeorgiaCares counseling and persistent advocacy can substantially reduce or eliminate LEP charges.
Common mistakes Georgia beneficiaries make
Many Georgia Medicare beneficiaries make avoidable mistakes regarding creditable coverage and LEP.
The first mistake is not retaining annual creditable coverage notices. These notices are the proof of creditable coverage when the beneficiary later enrolls in Part D. Without the notices, the beneficiary may face an LEP that could have been avoided.
The second mistake is assuming all health insurance is creditable. Not all coverage qualifies. Only coverage that is "actuarially equivalent or better" to standard Part D meets the test. Prescription discount cards, manufacturer coupons, and charitable assistance programs do not qualify.
The third mistake is confusing Part D LEP with Part B LEP. The two penalties operate differently. Part B LEP is 10 percent for each 12-month period without Part B coverage. Part D LEP is 1 percent per month without creditable coverage. Both are permanent but the calculations and exceptions differ.
The fourth mistake is missing the 63-day SEP after loss of creditable coverage. Beneficiaries who delay beyond 63 days begin accumulating LEP. Acting promptly when coverage ends is critical.
The fifth mistake is believing the LEP is temporary. The LEP is permanent for the beneficiary's life. Once assessed, it remains.
The sixth mistake is not disputing an LEP when creditable coverage existed. The 5-level appeals process can eliminate or reduce the LEP when documentation is provided.
The seventh mistake is thinking the LEP is based on the plan premium. The LEP is calculated on the national base beneficiary premium (about $38.99 in 2026), not the specific plan premium.
The eighth mistake is not understanding the LEP adjustment. The percentage is fixed at enrollment, but the dollar amount adjusts annually as the base premium changes. A 24 percent LEP in 2026 means $9.36/month; in 2030 if the base premium rises to $45, the LEP would be 24 percent × $45 = $10.80/month.
The ninth mistake is failing to obtain creditable coverage documentation when needed. Coverage entities will typically provide backdated notices on request, but the beneficiary must ask.
The tenth mistake is not contacting GeorgiaCares (1-866-552-4464) for free counseling. SHIP counselors can help review the situation and identify the best approach.
How Brevy supports Georgia Medicare beneficiaries
Brevy (brevy.com) provides comprehensive Medicare and Medicaid resources for Georgia families. Our state-by-state guides cover creditable coverage, late enrollment penalties, Special Enrollment Periods, Part D, drug pricing, vaccines, prior authorization, appeals, and many other topics. We update our content as federal and state rules evolve. Our goal is to be the most trustworthy and up-to-date eldercare resource for American families. For free unbiased counseling on a specific case, contact GeorgiaCares (SHIP) at 1-866-552-4464.
Find personalized help understanding Medicare creditable coverage at brevy.com.
::: accordion Frequently asked questions about Georgia Medicare creditable coverage
What is the Medicare Part D Late Enrollment Penalty?
The Part D LEP is a permanent surcharge added to a beneficiary's Part D premium for each full month they went without creditable prescription drug coverage after their Initial Enrollment Period. The LEP is 1 percent of the national base beneficiary premium per month, codified at Section 1860D-13(b) of the Social Security Act and 42 CFR 423.46.
How is the LEP calculated?
LEP = (Number of months without creditable coverage) × 1 percent × (National base beneficiary premium). For 2026, the base premium is approximately $38.99. A 24-month gap results in a 24 percent LEP, or $9.36 per month permanent.
What is the national base beneficiary premium?
The national base beneficiary premium is the CMS-calculated reference amount used for LEP calculation. It is approximately $38.99 in 2026. The amount is updated annually based on Part D plan bid information and broader Medicare cost trends.
What is creditable coverage?
Creditable coverage is prescription drug coverage that is "actuarially equivalent or better" to standard Part D coverage. The determination is made by the coverage entity's actuaries based on CMS criteria, codified at 42 CFR 423.56.
What are common sources of creditable coverage in Georgia?
Common sources include: employer and union health plans (active or retiree), TRICARE for Life (military retiree), Federal Employees Health Benefits Program (FEHB), Veterans Affairs (VA) prescription coverage, Indian Health Service (IHS), Georgia State Health Benefit Plan (SHBP) retiree coverage, and certain pre-65 individual market plans.
What is NOT creditable coverage?
Prescription discount cards (Costco, RxSpark, GoodRx, Blink Health), manufacturer copay coupons, charitable assistance programs (Patient Access Network Foundation, HealthWell Foundation), medication therapy management programs, and limited-benefit insurance (cancer-only, accident-only).
How do I know if my coverage is creditable?
Coverage entities are required by 42 CFR 423.56 to provide an annual creditable coverage notice by October 15 each year. The notice states whether the coverage is creditable. Retain these notices each year.
What if I don't receive an annual creditable coverage notice?
Contact your coverage entity (employer HR, plan administrator, federal agency) and request the notice. The entity is required to provide it. If you cannot obtain the notice, contact GeorgiaCares (1-866-552-4464) for help.
What happens when my creditable coverage ends?
You have a 63-day Special Enrollment Period under 42 CFR 423.64 to enroll in a Part D plan without incurring LEP. Enroll promptly when coverage ends to avoid penalty.
Can I have creditable coverage and Part D at the same time?
Yes. You can have multiple coverage sources. For example, VA-enrolled veterans can have Part D in addition to VA. FEHB retirees can have both FEHB and Part D. The benefit of having both is access to additional pharmacies or specific drugs.
Is COBRA continuation coverage creditable?
COBRA may be creditable if the underlying employer plan was creditable. The employer should provide creditable coverage notices during COBRA. Retain notices and confirm creditable status.
Is TRICARE for Life creditable coverage?
Yes. TRICARE for Life is creditable. Military retirees with TRICARE for Life can defer Part D enrollment indefinitely without LEP.
Is VA prescription drug coverage creditable?
Yes. VA prescription drug coverage is creditable for enrolled veterans.
Is FEHB creditable coverage?
Most FEHB plans are creditable. Each plan must certify creditable status annually. Check the annual creditable coverage notice from your specific FEHB plan.
Is the Georgia State Health Benefit Plan (SHBP) creditable?
The Georgia SHBP retiree plans are typically creditable. Check the annual notice from SHBP. SHBP contact: 1-800-610-1863.
Are pre-65 individual market plans creditable?
ACA marketplace plans are typically creditable for the pre-Medicare period. After Medicare eligibility, the marketplace plan may continue but is not creditable for Medicare LEP purposes. Transition to Medicare-compatible coverage.
Is the Medicare Advantage prescription drug plan (MA-PD) considered creditable?
Yes. If you are enrolled in an MA-PD plan, that counts as Part D coverage. No LEP applies for periods of MA-PD enrollment.
Can I dispute an LEP determination?
Yes. The LEP can be disputed through the standard Medicare 5-level appeals process. The most common dispute involves providing additional creditable coverage documentation that was not initially submitted.
What is the process for disputing an LEP?
File a Level 1 reconsideration with the Part D plan within 60 days. Submit creditable coverage notices and supporting documentation. The plan recalculates the LEP. Most disputes are resolved at Level 1.
Can I get a refund of past LEP payments if I successfully dispute?
Possibly. If the dispute is resolved in your favor and the LEP should not have been assessed, you may be eligible for a refund of past payments. Discuss with the plan and GeorgiaCares.
How long is the LEP imposed?
The LEP is permanent. It applies to the beneficiary's Part D premium for the rest of their life. The dollar amount adjusts annually as the national base beneficiary premium changes.
Can I avoid the LEP by enrolling in a $0 premium plan?
No. The LEP is added to the plan premium. Even on a $0 premium plan, you pay the LEP. The LEP is calculated on the national base beneficiary premium, not your specific plan's premium.
Does Extra Help (LIS) waive the LEP?
LIS does not waive the LEP. Beneficiaries on LIS still face LEP if they did not have creditable coverage during the gap. However, LIS recipients have $0 premium on benchmark plans, so the LEP is the primary cost they pay. Some LEP appeals may be successful for LIS recipients with limited income.
What if my coverage was creditable but I cannot get a notice now?
Contact the coverage entity (former employer HR, former insurance company, federal agency) and request a backdated creditable coverage notice. Most entities will provide retroactive documentation. If you cannot obtain documentation, GeorgiaCares (1-866-552-4464) and Atlanta Legal Aid (404-377-0701) can help.
Where can I get free help with LEP disputes?
GeorgiaCares (SHIP) at 1-866-552-4464 provides free unbiased counseling on creditable coverage and LEP disputes. Atlanta Legal Aid Senior Citizens Law Project (404-377-0701) and Georgia Legal Services Program (1-800-498-9469) provide free legal representation for low-income beneficiaries. :::
::: cta Get help with Medicare creditable coverage and Part D LEP
- DCH Medicaid Member Services 1-866-211-0950
- Medicare 1-800-MEDICARE (1-800-633-4227)
- GeorgiaCares (SHIP) 1-866-552-4464
- Social Security Administration 1-800-772-1213
- Georgia State Health Benefit Plan (SHBP) 1-800-610-1863
- TRICARE for Life 1-866-773-0404
- VA Atlanta 1-404-321-6111
- VA Augusta 1-706-733-0188
- VA Decatur 1-404-728-7714
- VA Dublin 1-478-272-1210
- Office of Personnel Management (FEHB) 202-606-1800
- Medicare Rights Center 1-800-333-4114
- Center for Medicare Advocacy 1-860-456-7790
- Justice in Aging 202-289-6976
- Atlanta Legal Aid Senior Citizens Law Project 404-377-0701
- Georgia Legal Services Program 1-800-498-9469
- 211 Georgia
- Eldercare Locator 1-800-677-1116 :::
This guide is provided by Brevy (brevy.com) as a public education resource. It does not constitute legal, medical, or financial advice. Medicare rules, the national base beneficiary premium, and Part D plan terms change annually. For specific guidance on your situation, consult the agencies and organizations listed above, including GeorgiaCares (1-866-552-4464) for free unbiased counseling, or speak with a licensed Medicare agent. Last verified May 13, 2026.