If a person has an employer group health plan (EGHP) with creditable drug coverage, can he voluntarily drop it and buy a Part D plan without penalty or does he have to relinquish his employer plan involuntarily? If he can voluntarily drop the EGHP, is he confined to the Annual Enrollment Period each (11/15 - 12/31) to enroll in a Part D plan, or can he buy a Part D plan any time of the year (within that 63-day limit)? 

Beneficiaries who have creditable EGHP coverage have a SEP to switch from the EGHP to a Part D plan or from a Part D plan to an EGHP during the EGHP's open enrollment season. This is true even if it does not coincide with the Part D Annual Enrollment Period (11/15-12/31 each year).  The SEP is described in Section 20.3.8.1 of the PDP Enrollment Guidance.

Apart from the above SEP, if someone covered by an EGHP that offers creditable coverage voluntarilyEGHP, there would be no SEP to join a Part D plan.  On the other hand, if the EGHP ceased offering coverage to the beneficiary, then the person has INVOLUNTARILY lost the EGHP coverage. In that instance, the person has a 60-day SEP to join a Part D plan.  Using that SEP protects the person from a penalty premium because the person would not go 63 days without creditable drug coverage. This SEP is found in Section 20.3.5 of the PDP Enrollment Guidance.

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