Medicare Enrollment Periods—It’s Complicated!

Are you over age 65 and still working or your spouse is still working and have Health Insurance through an Employer Group Health Plan (EGHP)?  If so, you may be able to delay enrollment in Medicare Part B.  Again, I said MAY.  The rules for allowing you to refuse Medicare Part B during your Initial Enrollment Period (IEP), because you have an EGHP, state you can sign up for Part B any month you continue have the EGHP or when you are going to lose this plan either because of retirement or your employer is discontinuing the plan.  This is called a Separate Enrollment Period (SEP).  If you stay on the Employer’s Plan at age 65 because you or your spouse are continuing to work the Employer must have more than 20 employees.  If so, then the Employer’s Plan is your primary insurance.  If the Employer has 20 or less employees then you MUST sign up for Medicare during the IEP.  

The IEP begins the 3 months before you turn age 65, the month you turn 65, and the following 3 months.  If you sign up for Medicare in the 3 months preceding your 65th birthday then your Medicare will be affective the first day of the month you turn age 65.  If you sign up the month you turn age 65, Medicare is effective the first day of the following month.  If you sign up for Medicare in the 3 months following your 65th birthday then you are delaying  your coverage even further, up to 5 months.  It’s very important to apply early for Medicare if you do not have an EGHP to avoid a loss of coverage.

The SEP is the 8 month period starting the month after you stop working or lose your Employer’s Plan.  If you stop working in March then your SEP begins April and ends November.  The month you enroll determines the month your Medicare Part B begins.  If you enroll any month after April your Medicare Part B will begin the following month.  If you know you are losing your EGHP you can also sign up the 2 months prior to March.  This point is very important:  If you have COBRA coverage, VA coverage, or a retiree health plan, you don’t have coverage based on current employment. You’re not eligible for a Special Enrollment Period.

Please don’t make that mistake!  If you miss your Special Enrollment Period then you are restricted to signing up for Medicare during the General Enrollment Period (GEP) which is January, February, and March  of each year and coverage is delayed until July of that year.  You will also pay a 10% penalty on your monthly premium for each 12 month period you could have had Medicare but did not enroll.  This penalty is for the rest of your life.  

 

There are also other factors to take into consideration when applying for Medicare Part B.  If you have an EGHP and you want to sign up for Medicare as a supplement you may.  But, keep in mind you may have an increase in your premium based on your income.  This would be on top of the normal monthly Part B premium.  This is called Income Related Medicare Adjustment Act (IRMAA). In some cases this adjustment could double your Medicare Part B.  Social Security can inform you if would fall into that category.  Do your research before making these decisions and do it early!