When To Apply for Medicare?

When Does Medicare Start?

Most people should sign up for Medicare coverage starting three months prior to their 65th birthday. However, you can delay enrolling if you have coverage through your employer.

In this article, we’ll explain everything you need to know to get all your Medicare benefits on time and without a penalty.

Medicare Mistake #2: Forgetting to Sign Up for Medicare at Age 65

How Soon Before My 65th Birthday Should I Enroll in Medicare?

As your 65th birthday approaches, you are entitled to an Initial Enrollment PeriodThe Initial Enrollment Period is a seven-month period when new beneficiaries can enroll in Medicare without a penalty. Most people enroll in Medicare at age 65. (IEP) for Medicare. Your IEP has certain rights and privileges that you have earned.

Your IEP is a 7-month period of time. It begins 3 calendar months before your 65th birthday. It ends 3 calendar months after your birthday.

So, for example, if your birthday is in June, your IEP starts in March and ends in September. That gives you plenty of time to enroll.

If you want your Medicare benefits to begin as soon as possible, enroll in Medicare at the beginning of your Initial Enrollment Period. When you do, your Medicare Part A and Part B coverage will begin the first day of the month you turn age 65.

Am I Automatically Enrolled in Medicare When I Turn 65?

No. Not necessarily.

In most cases, you will not be automatically enrolled in Medicare when you turn age 65. Only people receiving Social Security benefits for at least 4 months prior to turning age 65 are automatically enrolled.

However, in most cases, Social Security will send you an enrollment package about 90 days before your 65th birthday. The package will explain your Medicare benefits and provide you with enrollment instructions.

How Do I Enroll in Medicare for the First Time?

If you do not receive Social Security benefits, you should sign up for Medicare three months before your 65th birthday. This is when your initial enrollment period begins.

There are a couple of ways you can enroll. But don’t call Medicare directly. The Social Security Administration handles enrollment for Medicare.

The easiest way to sign up for Medicare is through the Social Security Administration (SSA) website. Use their online application form.

You can also make an appointment local Social Security office by calling 1-800-772-1213 (TTY 1-800-325-0778). They are available Monday through Friday from 8:00 a.m. to 7:00 p.m.

If you sign up for Medicare at your local Social Security off three months before your 65th birthday, you will receive your Medicare card in advance. You need your Medicare card (your Medicare number) to qualify for private insurance, such as a Medicare Advantage planMedicare Advantage (MA), also known as Medicare Part C, are health plans from private insurance companies that are available to people eligible for Original Medicare (Medicare Part A and Medicare Part B)..

Are There Any Special Enrollment Circumstances?

If you delay Medicare enrollment at age 65, because you are still working and have group health coverage, you can request a Special Enrollment PeriodSpecial Enrollment Periods (SEPs) allow beneficiaries to change their Medicare Advantage and Part D plans due to a special circumstance. Common reasons for a SEP include moving, losing employer coverage, and Medicaid eligibility, to name... (SEP) when you no longer have your employer’s coverage. This includes losing your spouse’s current employer coverage.

Medicare grants individuals a SEP for certain life situations. One special situation is when you lose your current coverage due to a change in employment. When granted, special enrollment periodsEnrollment periods are designated time periods to enroll or disenroll from the various parts of Medicare. There are six Medicare enrollment periods. allow you to sign up for Part A and Part B coverage and get private Medicare health insurance in the same way you can during your Initial Enrollment Period.

When Does Medicare Coverage Start?

In most cases, coverage begins on the first day of the month after you enroll. That said, it will not begin prior to the month you turn age 65.

However, you cannot enroll in a private health plan or drug plan until Social Security issues your Medicare number and send you your Medicare card. So, if you delay enrolling until after your 65th birthday your health care benefits and primary coverage from your private health plan will be delayed.

Is There a Penalty for Not Enrolling in Medicare Part A at Age 65?

Yes, potentially.

There are potential penalties if you do not sign up for Medicare at age 65. Even though Medicare is a voluntary system, penalties may apply if you do not enroll at age 65 and do not have coverage through your employer.

What is Creditable Coverage?

In most cases, group health plan coverage through an employer counts as creditable coverageCreditable coverage refers to health insurance or prescription drug benefits that meet Medicare's minimum qualifications necessary to avoid a penalty.. Employer coverage may be creditable if it provides the same level of coverage as Medicare.

Most high deductible plans, including a health savings account, are not creditable health insurance for Medicare. Also, your coverage can be terminated based on how many employees your employer has.

Also, the prescription drug benefits offered through your employer coverage may not meet the government’s standards. Medicare prescription drug coverage has its own set of requirements.

If you are still working at age 65, and you have coverage through your job or have other retiree coverage, you may be able to keep it and delay when you sign up for Medicare coverage. Call your group health plan and ask them if your coverage is creditable.

What are the Benefits of Delaying Medicare Enrollment?

Medicare coverage has several parts.

Part A is hospital insurance for inpatient coverage. It also covers skilled nursing facility care after a period in the hospital.

Part B is your medical insurance coverage for doctor visits, tests, supplies, and durable medical equipmentDurable medical equipment (DME) is equipment that is designed to last and can be used repeatedly. It is suitable for home use and includes wheelchairs, oxygen equipment, and hospital beds.. Together, they are your Original MedicareOriginal Medicare is private fee-for-service health insurance for people on Medicare. It has two parts. Part A is hospital coverage. Part B is medical coverage. coverage.

Both Part A and Part B have potential penalties for late enrollment.

In addition to Parts A and B, there are two private insurance options. Part C is a health plan option from private insurance companies. These plans, also called Medicare Advantage, are optional and have no penalties.

Part D is Medicare prescription drug coverage. These plans are sold by private insurance companies. Although optional coverage, Part D has a penalty for late enrollment if you decide to join a plan after your Initial Enrollment Period ends.

Can I delay Part A enrollment?

Your Part A benefits are funded through Medicare taxes during the years that you work. If you worked and paid Medicare taxes for a minimum of 10 full years, there is no reason not to enroll in Medicare Part A at age 65. You have premium-free Medicare Part A coverage.

If you or your spouse did not work the minimum 10 years, you will need to pay a monthly premium for Part A. In this case, if you have health insurance coverage through your job, you can potentially delay enrollment.

If you do not have premium-free Part A coverage, don’t have other coverage, and don’t enroll in Part A when first eligible, a penalty will apply. The government will add a 10 percent late penalty to your monthly premium for double the number of years you were not enrolled in Part A without other coverage.

Can I delay Part B enrollment?

Depending on the cost and the type of health insurance your employer provides, you may save money if you don’t sign up for Medicare Part BMedicare Part B is medical coverage for people with Original Medicare benefits. It covers doctor visits, preventative care, tests, durable medical equipment, and supplies. Medicare Part B pays 80 percent of most medically necessary healthcare services. until you retire. Medicare Part B benefits have a monthly premium of [medicare_cost value=”partb-premium”] per month.

However, if you do not have other coverage and you delay enrollment, the government will penalize you. It does so by increasing your monthly premium by 10% for every twelve-month period you were eligible for Part B but were not enrolled.

The only way to avoid the Medicare Part B penalty is to have other creditable coverage. Before making the decision not to enroll on time, call your group health plan and ask if your coverage is creditable.

Can I delay Part D enrollment?

If the group health plan coverage provided by your employer includes prescription drug coverage, you might be able to delay enrollment in a Part D prescription drug plan. It all depends on the health insurance you have.

Even though Medicare Part DMedicare Part D plans are an option Medicare beneficiaries can use to get prescription drug coverage. Part D plans provide cost-sharing on covered medications in four different phases: deductible, initial coverage, coverage gap, and catastrophic. Each... plans are a voluntary benefit, not joining a Medicare Part D plan while eligible may lead to late penalties. If you do not have Medicare Part D or other creditable prescription drugs coverage for at least 63 consecutive days, the government will apply a penalty when you do join a plan.

The Part D penalty adds a 1% increase to your Part D monthly premium for each month you were not enrolled in a plan.

If you are considering delaying Part D enrollment, call your group health plan. Ask them if your plan includes creditable prescription drug coverage.

Your Initial Enrollment Period Benefits and Protections

As mentioned above, your Initial Enrollment Period is a full 7-month period around your 65th birthday. During this time, you have rights and benefits that you should not ignore.

Medicare is a right we all earn by paying our taxes. This right guarantees that we have access to healthcare as we age into our retirement years.

During your IEP, your Medicare coverage cannot be denied.

The government will not deny your enrollment in Part A and Part B for your major medical coverage. And, private health plans and prescription drug plans cannot turn you down. Your enrollment is guaranteed by federal law.

However, if you fail to enroll during your IEP, your application for additional coverage can be denied. And, your enrollment in Medicare will be delayed.

Once your IEP expires, your next opportunity to sign up for Medicare is during Medicare’s General Enrollment PeriodThe General Enrollment Period (GEP) allows beneficiaries to enroll in Medicare Part A and Part B  from January 1 to March 31 if they missed their Initial Enrollment Period. Beneficiaries can also enroll in a... (GEP). This happens every January 1 through March 31.

Your Medigap Protections

The most important right you have during your IEP is the right to buy Medicare Supplement insuranceMedicare Supplements are additional insurance policies that Medicare beneficiaries can purchase to cover the gaps in their Original Medicare (Medicare Part A and Medicare Part B) health insurance coverage. (Medigap). This is additional coverage you can buy to help pay you Medicare Part A and Part B out-of-pocket costsOut-of-Pocket Costs for Medicare are the remaining costs that are not covered by the beneficiary's health insurance plan. These costs can come from the beneficiary's monthly premiums, deductibles, coinsurance, and copayments., including deductiblesA deductible is an amount a beneficiary must pay for their health care expenses before the health insurance policy begins to pay its share., copays, and coinsuranceCoinsurance is a percentage of the total you are required to pay for a medical service. .

Medicare Parts A and B cover about 80% of your major medical costs. Unless you have additional coverage, you pay the remaining 20% as an out-of-pocket cost.

Here are some of the different ways people cover their share:

1. Directly out of pocket;
2. Through retiree health benefits;
3. Through veteran health benefits;
4. Through MedicaidMedicaid is a public health insurance program that provides health care coverage to low-income families and individuals in the United States. health benefits; and
5. Through a Medigap policy.

Insurance experts generally agree that Medicare Part A, Medicare Part B, Medicare Part D prescription drug plan, and a Medigap policy are the best coverage available. However, you are only guaranteed Medigap coverage for a short period of time.

A six-month clock starts as soon as you sign up for Medicare Part B coverage. This is your Medigap Open Enrollment PeriodUpon initial enrollment in Medicare Part A and Part B, beneficiaries have a one-time, six-month period to buy a  Medicare supplement policy with guaranteed issue rights. This is the Medigap Open Enrollment Period..

During this time you have a guaranteed issue rightGuaranteed-issue is a right granted to Medicare beneficiaries and applies to Medicare Supplement insurance (aka, Medigap plans). All states and the federal government enforce this essential right, which protects Medicare beneficiaries from medical underwriting. to buy the Medigap policy of your choice. You cannot be denied coverage, even if you have a pre-existing conditionA pre-existing condition is any health problem that occurred before enrolling in a health plan. The Affordable Care Act law made it illegal for health plans to or charge more due to a pre-existing condition.....

Once your Medigap policy has been issued, your coverage cannot be canceled or terminated. As long as you continue paying your monthly premiums, your policy will remain in effect.

The best way to understand the importance of supplemental Medicare coverage is to look at a chart that shows the gaps in Medicare coverage and what each plan pays:

What Else Do I Need to Know When I Sign Up for Medicare?

Above, we mentioned that you have certain Medigap protections during your Initial Enrollment Period. You also have a trial right protection if you decide to get your health insurance through a Medicare Advantage plan.

Here’s how your trial right works.

If you sign up for Medicare during your Initial Enrollment Period, then join a Medicare Advantage plan, you have a full 12-month period to try it out. If you don’t like it, you can go back to your Medicare Part A and Medicare Part B coverage, and add a Part D plan for drug coverage.

You will also have your Medigap protection so that you can buy a Medicare Supplement. If you had a Medicare Supplement before you joined a Medicare Advantage plan, you will have the right to get the plan back. If not, you can get any plan available.

How Do I Pay for Medicare?

Medicare Part A is funded during the years you paid Medicare taxes. If you did not work and pay taxes for a minimum of 10 full years, you will pay a Medicare Part A premiumMost beneficiaries get Medicare Part A benefits (inpatient coverage) premium-free based on the number of years they paid Medicare taxes. However, beneficiaries that did not pay Medicare taxes for the required 10 years pay a.... The government takes this premium directly from your Social Security benefits.

If you are enrolled automatically, your Medicare Part B premiums will be automatically deducted from your Social Security account.

If you are not automatically enrolled in Medicare, you will pay your Part A and Part B premiums directly to Social Security. And, Social Security will require you to pay 3 months of premiums in advance. After that, your monthly premiums will be automatically deducted from your bank account.

If you join a Medicare Advantage plan and/or a Medicare Part D plan, you pay the premiums for these plans directly to the private insurance company. The same goes for a Medicare Supplement policy. Social Security does not collect premiums for private insurance.

Paying for Medicare with Medicaid

If you also qualify for Medicaid, you can apply for a Medicare Savings Program. You won’t have 100% free Medicare, but Medicaid will help pay your monthly premiums and out-of-pocket costs.

You may also apply for the Extra HelpSocial Security's Low-Income Subsidy (LIS) program helps Medicare beneficiaries pay for their Medicare Part D prescription drugs by paying some of the costs. Also known as "Extra Help", beneficiaries who qualify for LIS receive premium... program through Social Security. Extra Help assists with the cost of your prescription medications through Part D.

If you have both Medicare and Medicaid, you should also look into Medicare Special Needs Plans in your area. Dual-eligibleDual-eligible beneficiaries are those who receive both Medicare and Medicaid benefits. It includes beneficiaries enrolled in Medicare Part A and/or Part B while receiving full Medicaid and/or financial assistance through a Medicare Savings Program.... Special Needs Plans (D-SNP) help coordinate all of your Medicare and Medicaid benefits through a single plan.

When to Sign Up for Medicare if Still Working

Medicare is a confusing topic. With so many moving parts, dates, deadlines, and options, it’s easy to miss a detail or two, which can end up costing you money, coverage, or both.

Medicare is not a health insurance policy that you can turn on and off like a switch. It has various enrollment periods, and the government wants you to follow them.¹Medicare.gov, ”Joining a health or drug plan”, Accessed January 11, 2022

If you are thinking of delaying Medicare for a few years, maybe because you are working, healthy, or don’t want the added expense, think again. Consider and fully understand the consequences of delaying enrollment.

The only people who can successfully delay Medicare enrollment are those individuals with creditable group health coverage through an employer.

The federal government has the power to charge you penalties if you don’t enroll on time. Not only will you not have coverage if you delay enrollment, but you will pay more when you do enroll.²Medicare.gov, ”When does Medicare coverage start?”, Accessed January 11, 2022

Your Initial Enrollment Period (When You Should Enroll)

For some people, Medicare enrollment happens automatically. For most people, it doesn’t. Regardless, your Individual Enrollment Period (IEP) is the same. It does not matter if you are still working or not.

Your IEP is a seven-month rolling period that includes:²Medicare.gov, ”When does Medicare coverage start?”, Accessed January 11, 2022

• The 3 calendar months before your 65th birthday
• The month of your 65th birthday
• The 3 calendar months after your 65th birthday

During your IEP you can enroll in Medicare Part A and Medicare Part B. You may also join a prescription drug plan (Medicare Part D) or a Medicare Advantage plan (Medicare Part C). Part C and Part D are private health insurance options.¹Medicare.gov, ”Joining a health or drug plan”, Accessed January 11, 2022

If you plan to keep your Original Medicare, your IEP is also when you can buy Medicare Supplement insurance (aka, Medigap) from insurance companies. During your IEP you have a guaranteed issue right to get Medigap coverage.

This right guarantees that you can purchase supplemental insurance without going through medical underwriting (i.e., you can’t be turned down). This is critical if you have one or more chronic health conditions.³Medicare.gov, ”When can I buy Medigap?”, Accessed January 11, 2022

NOTE: If you live in Puerto Rico you will not receive Medicare Part B automatically. You will need to sign up for it during your IEP.⁴CMS.gov, ”Original Medicare (Part A and B) Eligibility and Enrollment”, Accessed January 11, 2022

Special Enrollment Period (When You Retire)

Your IEP is the best time to enroll. However, if you are still working and want to sign up for Medicare when you retire, you can ask for a Special Enrollment Period.

Medicare allows Special Enrollment Periods for special circumstances. These include:

1. When you no longer have group health insurance;
2. When you move out of your plan’s service area and no longer have health coverage; and
3. When you have COBRA coverage and need permanent health coverage.

There are other circumstances that allow you to get a Special Enrollment Period, but they are outside this discussion.

If you already have Medicare Part A and you’re eligible to sign up for Medicare Part B through a Special Enrollment Period, you can apply online or by fax.

To apply you will need to complete form CMS 40B. You will also need to complete form CMS L564 (Request for Employment Information), and provide evidence of employment and proof of employer health coverage.

If you choose, you can fax your forms and evidence of employment and health coverage to your local Social Security office. The fax number is available on the SSA Office Locator.

If you don’t already have Part A you can apply online at SSA.gov/benefits/medicare or call Social Security at 1-800-772-1213 for more information.

Group Health Insurance Coverage

If you are still working past age 65, and you have employer health coverage, you might be able to delay enrolling in Medicare without a penalty.

It all depends on whether your group health insurance is creditable health coverage. If it is, great, you can sign up for Medicare when you retire. If it isn’t, you can’t, and you should sign up for Medicare at age 65.

The only way to know for certain is to call your plan and ask. Do not take accept the word of your company’s human resources department. They are not the ones that will incur a penalty. You will.

Also, for your protection, keep evidence of your employer coverage. Keep all bills, claims, and other correspondence. Chances are you will need it, to prove you had employer coverage when you do sign up for Medicare.

Enroll in Medicare Part A On Time

If you paid Medicare taxes for the required 40 quarters (10 years) needed for premium-free Medicare Part A, there is no reason not to sign up for Medicare at age 65. There is no cost for your hospital health insurance from Medicare, so there’s no reason to delay enrolling.

If you did not work and pay taxes for 10 full years, and you are still working and have employer coverage, you should delay enrolling in Part A for hospital insurance. This is particularly true if you plan to work long enough for premium-free Part A coverage.

Enroll in Medicare Part B On Time if Your Group Health Plan is Secondary

If your employer’s group plan pays secondary to Medicare, you need to sign up for Medicare Part B on time. Otherwise, you won’t have medical insurance coverage.

How many employees your employer has is a factor.

If your employer has less than 20 employees, Medicare is the primary payer. Your employer’s health insurance is not required to continue to offer benefits. Most small employers offering job-based coverage may require you to take Medicare.

Also, if your group health benefits are limited, Part B may pay for costs not covered by your employer’s health insurance. For example, Medicare Part B covers an annual wellness visitMedicare's annual wellness visit is a preventative care service provided to its beneficiaries at no cost. The annual wellness visit is available every twelve months after the beneficiary's initial "Welcome to Medicare" preventative visit., various screenings, and most vaccines at no cost. Most group health plans do not cover these services at no cost.

A Health Savings Account May Not Be Creditable

Over the past decade or two, the Health Savings Account (HSA) became a popular way to pay for healthcare on a pre-tax basis. By using untaxed dollars in an HSA to pay for deductibles, copaymentsA copayment, also known as a copay, is a set dollar amount you are required to pay for a medical service., coinsurance, and other expenses, you can reduce your overall health insurance costs.

HSAs only work with High Deductible Health Plans. These health insurance plans may or may not be creditable coverage for Medicare. Most are not.

Be sure to check with the plan to determine if it is creditable employer coverage. If the plan is not creditable and you delay enrolling in Medicare, there may be a penalty.

Medigap Protections While Employed

One of the most important protections Medicare gives us is the right to buy Medicare Supplement insurance. This is a short-term right that expires six months after our Medicare Part B benefits begin.

How does employment after age 65 impact our guaranteed issue right for a Medigap policy?

For the most part, so long as you maintain your employer coverage, you don’t have to worry about it. This is true even if you are enrolled in Medicare Part A.

Your guaranteed issue right starts as soon as your Medicare Part B benefits are effective. So, don’t delay enrollment.

In fact, start enrollment three months before the month you plan to retire. This way you will have your Medicare card and coverage will begin the first day of the month you retire.

Once you have your Medicare card, then you can apply for a Medicare Supplement plan.

Coverage Though Your Spouse’s Current Employer

If you have health care coverage through your spouse’s current employer, you can delay Medicare enrollment. The rules for you are the same as they are for your spouse and all other Medicare enrollees.

When considering signing up for Medicare, remember that you can sign up for Part A now and Part B later. This way you can keep your spouse’s employer coverage, but use Medicare as your primary insurance for hospital visits.

You Also Need Creditable Drug Coverage

In addition to creditable coverage for your healthcare, you need creditable drug coverage. They are not one and the same.

Most employer coverage includes some coverage for prescription medications. This coverage may not meet Medicare coverage requirements.

If you are enrolled in Medicare Part A and/or Part B, you qualify to join a Medicare Part D plan for prescription drug coverage. Your employer coverage may be creditable if it meets the basic coverage standards of a Medicare Part D plan.

If your employer coverage does not include creditable drug benefits, you can join a basic Part D plan to get this coverage. If you delay coverage, penalties may apply.

Late Enrollment Penalties (Why Medicare Has Them)

When the Medicare program was signed into law in 1965, Congress realized that it would need a stick to get healthy people to join. After all, most people don’t like the idea of spending money on something they don’t use. So the law gives the Centers for Medicare & Medicaid Services and the Social Security Administration the power to assess penalties. After all, if only unhealthy people enrolled, the cost for these people would skyrocket.

Three of the four parts of Medicare have potential penalties, A, B, and D. These penalties affect your monthly premiums, not the deductibles, copayments, or coinsurance you pay when you use your Medicare benefits.⁵Medicare.gov, ”Part A late enrollment penalty”, Accessed January 11, 2022⁶Medicare.gov, ”Part B late enrollment penalty”, Accessed January 11, 2022⁷Medicare.gov, ”Part D late enrollment penalty”, Accessed January 11, 2022

Medicare Part A Late Enrollment Penalty

Most people (and their spouse) get their Medicare Part A coverage (hospital insurance)  premium-free by working 10 or more years and paying Medicare taxes⁸Medicare.gov, ”Medicare costs at a glance”, Accessed January 11, 2022. However, if you didn’t pay taxes for a minimum of 40 quarters (10 years), then you will pay a monthly premium for your Part A coverage. A penalty may apply for late enrollment.⁵Medicare.gov, ”Part A late enrollment penalty”, Accessed January 11, 2022

If you miss your IEP or intentionally delay Medicare Part A enrollment:⁵Medicare.gov, ”Part A late enrollment penalty”, Accessed January 11, 2022

• Your Part A monthly premium will be increased by 10%.
• The 10% penalty will continue for twice the number of years you were not enrolled when you were eligible.

Medicare Part B Late Enrollment Penalty

Everyone eligible for Medicare pays a Medicare Part B premiumThe Medicare Part B premium is the monthly charge paid by beneficiaries for their outpatient medical care, services, and supplies. A beneficiary's premium may be uplifted by an IRMAA surcharge if their income is above..., for their medical insurance, when they enroll. Medicare taxes collected during employment only apply to Part A for hospital inpatient coverageMedicare Part A is hospital coverage for Medicare beneficiaries. It covers inpatient care in hospitals and skilled nursing facilities. It also covers limited home healthcare services and hospice care., but not for Part B coverage, and late enrollment penalties apply.⁶Medicare.gov, ”Part B late enrollment penalty”, Accessed January 11, 2022

If you do not enroll in Medicare Part B when you are first eligible:⁶Medicare.gov, ”Part B late enrollment penalty”, Accessed January 11, 2022

• Your Part B monthly premium will increase by 10% for each 12-month period that you are not enrolled.
• You will pay a higher premium for the remainder of your life.

Medicare Part D Late Enrollment Penalty

The Medicare prescription drug coverage program was added in 2003 to help aging seniors and people with Social Security Disability Insurance afford their prescription medications. Even though a Part D insurance plan is optional private insurance, CMS created a penalty structure to encourage people to join when first eligible.⁷Medicare.gov, ”Part D late enrollment penalty”, Accessed January 11, 2022

If you do not join a Medicare Part D plan when you are first eligible:⁷Medicare.gov, ”Part D late enrollment penalty”, Accessed January 11, 2022

• Your Part D monthly premium will increase by 1% of the national base beneficiaryA person who has health care insurance through the Medicare or Medicaid programs. premium average multiplied by the number of months you were not enrolled.
• In most cases, you will pay the premium for as long as you have Part D coverage.
• If you receive the Extra Help benefit from Social Security you will not pay the penalty.

Do Late Enrollment Penalties Apply When Employed?

Many of us work well past our 65th birthday, and Medicare takes this into account. If you are employed and your employer provides creditable health insurance, you can delay enrollment. However, it is not safe to assume that 100% of your employer coverage is creditable. It is highly advisable to call Medicare and confirm that you are in compliance.⁹Medicare.gov, ”Working past 65”, Accessed January 11, 2022

When your current employment group health plan coverage ends you have the option to use COBRA to bridge the gap between your employer’s group coverage and Medicare. You’ll need to add Part B within eight months of the earliest of either the end of your employment or the end of your group health coverage.⁹Medicare.gov, ”Working past 65”, Accessed January 11, 2022

If you have a Health Savings Account (HSA) with a high deductible health plan through your or your spouse’s current employment, you may be eligible for a Special Enrollment Period (SEP). In this case, to avoid a tax penalty you must stop contributing to your HSA at least 6 months prior to enrolling in Medicare.⁹Medicare.gov, ”Working past 65”, Accessed January 11, 2022

How to Sign Up for Medicare

Your Medicare enrollment may or may not be automatic. Some people need to sign up for Medicare, and others don’t.

If you are still working and do not want to sign up for Medicare coverage at age 65, you need to call Social Security to let them know. This will help you avoid automatic Medicare enrollment.

If you receive Social Security, Railroad Retirement Board (RRB), or other federal retirement benefits four or more months prior to your 65th birthday, Social Security will enroll you in Part A and B automatically. SSA will send you a notice prior to your eligibility date.⁴CMS.gov, ”Original Medicare (Part A and B) Eligibility and Enrollment”, Accessed January 11, 2022

If you are not automatically enrolled, you must use the SSA website to start your enrollment or visit your local Social Security office.  If you get enrolled during your IEP, when your coverage begins will depend on the month you enroll.

If you enroll in Medicare Parts A and B:²Medicare.gov, ”When does Medicare coverage start?”, Accessed January 11, 2022

1. During the 3-month period before your birthday, coverage begins on the first day of the month you turn 65 (if your birthday is on the 1st, coverage begins the prior month).
2. During your birthday month, coverage starts on the first day of the next month.
3. During one of the three months after your birthday month, coverage starts on the first day of the month after you enrolled.

If you plan to stay in Original Medicare and want prescription drug coverage, you can enroll in a Part D plan as soon as you enroll in Medicare Part A and/or Medicare Part B.²Medicare.gov, ”When does Medicare coverage start?”, Accessed January 11, 2022

RELATED: Why Medicare Advantage Plans are Bad

Alternatively, you can join a Medicare Advantage plan that includes a Medicare Part D plan. To enroll in Medicare Advantage you must first enroll in Medicare Part A and B²Medicare.gov, ”When does Medicare coverage start?”, Accessed January 11, 2022. They will not enroll you until you have your Medicare number, which is printed on your Medicare card. In the past, it was the same as your Social Security number, but this is no longer the case. For security, your Medicare number is unique to you.¹⁰Medicare.gov, ”Your Medicare Card”, Accessed January 11, 2022

If You Missed Your IEP, Here’s What You Need To Do

Your IEP is the ideal time to enroll in Medicare. If you missed it, or if you delayed enrollment because you have creditable through your employer, your next option is the Medicare General Election Period (GEP), often referred to as the general enrollment period.²Medicare.gov, ”When does Medicare coverage start?”, Accessed January 11, 2022

GEP is a three-month period from January through March of each year. No matter when you enroll during GEP, your coverage start date will be July 1st.²Medicare.gov, ”When does Medicare coverage start?”, Accessed January 11, 2022

If you miss the first GEP after your IEP, you will not be allowed to enroll until the following January. That means you will be without coverage for well over a year and you will incur late enrollment penalties.²Medicare.gov, ”When does Medicare coverage start?”, Accessed January 11, 2022

Not Enrolling On Time is a Costly Mistake

It’s important to get enrolled in Medicare during your IEP so you can begin taking advantage of the benefits you’re earned. One of those benefits is your free “Welcome to Medicare” visit. This doctor visit includes a review of your medical and social history related to your health and education and counseling related to preventive services, including:¹¹Medicare.gov, ”‘Welcome to Medicare’ preventive visit”, Accessed January 11, 2022

• Certain screenings, flu, and pneumococcal shots, and referrals for other care, if needed.
• Height, weight, and blood pressure measurements.
• A calculation of your body mass index.
• A simple vision test.
• A review of your potential risk for depression and your level of safety.
• An offer to talk with you about creating advance directives.
• A written plan letting you know which screenings, shots, and other preventive services you need.

You pay nothing for the “Welcome to Medicare” preventive visit if your doctor or other qualified healthcare provider accepts Medicare-assignment. On this visit, the Part B deductible doesn’t apply.¹¹Medicare.gov, ”‘Welcome to Medicare’ preventive visit”, Accessed January 11, 2022

As we outlined above, gaps in Medicare coverage can be costly. In some cases, penalties can be waived, but this, too, can be very costly in the time and frustration spent trying to get a waiver approved. If you need a waiver, start on this Medicare.gov page.

 

Citations

• 1
  Medicare.gov, ”Joining a health or drug plan”, Accessed January 11, 2022
• 2
  Medicare.gov, ”When does Medicare coverage start?”, Accessed January 11, 2022
• 3
  Medicare.gov, ”When can I buy Medigap?”, Accessed January 11, 2022
• 4
  CMS.gov, ”Original Medicare (Part A and B) Eligibility and Enrollment”, Accessed January 11, 2022
• 5
  Medicare.gov, ”Part A late enrollment penalty”, Accessed January 11, 2022
• 6
  Medicare.gov, ”Part B late enrollment penalty”, Accessed January 11, 2022
• 7
  Medicare.gov, ”Part D late enrollment penalty”, Accessed January 11, 2022
• 8
  Medicare.gov, ”Medicare costs at a glance”, Accessed January 11, 2022
• 9
  Medicare.gov, ”Working past 65”, Accessed January 11, 2022
• 10
  Medicare.gov, ”Your Medicare Card”, Accessed January 11, 2022
• 11
  Medicare.gov, ”‘Welcome to Medicare’ preventive visit”, Accessed January 11, 2022