This notice is most relevant for people who are eligible for Medicare or those who will soon become eligible for Medicare. As an early retiree of the School District No. 1 Health and Welfare Trust, in most cases you and your spouse or domestic partner are not eligible for the Trust's early retiree plans if you are eligible for Medicare, so this information does not affect you. However, this notice would apply to the following Medicare-eligible people who are covered by the Trust's early retiree plans:

Medicare prescription drug coverage became available in 2006 to everyone who is eligible for Medicare. All Medicare prescription drug plans will provide at least a standard level of coverage set by Medicare. Some plans might also offer more coverage for a higher monthly premium.

The Trust has determined that the prescription drug coverages for early retirees and their dependents enrolled in the following Trust plans are on average expected to pay out at least as much as the standard Medicare prescription drug coverage will pay:

The Trust has determined that the following prescription drug coverages for early retirees and their dependents are not expected to pay out as much as the standard Medicare prescription drug coverage and are not considered creditable:

Therefore, if you are or become eligible for Medicare and are still eligible for Trust early retiree coverage according to plan eligibility and as summarized in this notice, you can keep the Trust's plan coverage and not pay a penalty if you later decide to enroll in a Medicare prescription drug plan.

Individuals can enroll in a Medicare prescription drug plan when they first become eligible for Medicare and each year from October 15 through December 7. However, because you have existing prescription drug coverage through the Trust that, on average, is as good as Medicare coverage, you can choose to keep the Trust's prescription drug coverage as long as you are eligible for it, and join a Medicare prescription drug plan later. You may also be eligible for a special enrollment period to sign up for a Medicare prescription drug plan at the time you lose eligibility for Trust coverage.

If you decide to enroll in a Medicare prescription drug plan and you are still eligible for Trust early retiree coverage according to plan eligibility and as summarized above, you may also continue your Trust prescription drug coverage. If you decide to enroll in a Medicare prescription drug plan and drop your Trust coverage, be aware that you will drop both medical and prescription drug coverage, and Medicare will be your only payer.

You should also know that if you drop or lose your coverage with the Trust and don't promptly enroll in Medicare prescription drug coverage after your Trust coverage ends, you may pay more to enroll in Medicare prescription drug coverage later. If you go 63 days or longer without prescription drug coverage that is at least as good as Medicare's prescription drug coverage, your monthly premium for a Medicare prescription drug plan will go up at least 1% per month for every month after your initial enrollment period that you did not have that coverage. For example, if you go 19 months without coverage, your Medicare prescription drug plan premium will always be at least 19% higher than what most other people pay. You will 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.

The Trust will provide you with a notice of creditable coverage. You may receive this notice at other times in the future such as before the next period you can enroll in Medicare prescription drug coverage, if this coverage changes, or upon your request.