Late Enrollment Penalty
Medicare was created to protect our retired citizens from the rising costs of health care as they age. To help pay for those costs, premiums, deductibles, and co-pays were added. Eligible recipients who fail to provide evidence of creditable group health coverage, or coverage equal to that received by Original Medicare, will pay a penalty if they fail to sign up for Part B. Here are some common questions regarding late enrollment penalties. How does the Part B late penalty work? If you don't sign up for Part B or have creditable coverage from a group health plan when you're first eligible, you'll have to pay a late enrollment penalty. The penalty clock starts ticking at the beginning of the month after your seven-month initial enrollment period (IEP) expires and shuts off on the final day of the annual general enrollment period (GEP from January - March) in which you sign up for Part B (or March 31). Your monthly premium for Part B may go up 10% for each full 12-month period that you could have had Part B but didn't sign up for it. You'll have to pay this penalty for as long as you have Part B. Once you've missed your first deadline for joining Part B, you will have to wait until the General Enrollment Period (from January 1 to March 31) to enroll in Part B. Coverage will start on July 1 of that year. What if I sign up inside 12-months from when my initial enrollment period ended? So long as a 12-month period from March 31st has not passed before coverage is obtained then you will not owe a penalty. Here are two examples: If your initial enrollment period ends on the last day of May 2018 and you obtain coverage on January 1st, 2019, you will have been without coverage for 10 months (June 1, 2018 – March 31, 2019 = 10 months). You will not be penalized. If your initial enrollment period ends on the last day of February 2018 and you obtain coverage on January 1st, 2019, you will have been without coverage for 13 months (March 1, 2018 – March 31, 2019 = 13 months). You will have a 10% monthly penalty added to your Part B premium for the rest of the time you are on Medicare Part B. Will I be penalized if I retain group health coverage from my employer? Not necessarily, as long the coverage is equal in benefit to Original Medicare. Once you lose this coverage, you are entitled special enrollment period to sign up for Part B without penalty. What if I have private insurance? Individual health coverage is not considered creditable coverage to avoid a penalty. You will be assessed a penalty if you do not obtain Part B coverage 12-months from your IEP. Do these rules apply if I am eligible for Medicare due to disability? Yes. The Part B penalty clock starts on the first of the month after your Initial Enrollment Period ends. If you have coverage from a group health plan by a spouse or family member your deadline begins after employment ceases. If for some reason you incur a penalty for not having signed up for Part B, the clock resets when you turn 65 and you will no longer have to pay the penalty. What if am living abroad when I turn 65? If you live outside the United States after you turn 65, and you or your spouse are not working, the penalty clock starts ticking at the end of your IEP. If you are working and have group health coverage, then same rules apply for when you lose this coverage. If you are covered by the national public health system of the country where you live, you will have an SEP upon your return to the US. To learn more about late enrollment penalties, contact a Licensed Sales Agent at info@medicareissimple.com.
Medicare was created to protect our retired citizens from the rising costs of health care as they age. To help pay for those costs, premiums, deductibles, and co-pays were added. Eligible recipients who fail to provide evidence of creditable group health coverage, or coverage equal to that received by Original Medicare, will pay a penalty if they fail to sign up for Part B. Here are some common questions regarding late enrollment penalties. How does the Part B late penalty work? If you don't sign up for Part B or have creditable coverage from a group health plan when you're first eligible, you'll have to pay a late enrollment penalty. The penalty clock starts ticking at the beginning of the month after your seven-month initial enrollment period (IEP) expires and shuts off on the final day of the annual general enrollment period (GEP from January - March) in which you sign up for Part B (or March 31). Your monthly premium for Part B may go up 10% for each full 12-month period that you could have had Part B but didn't sign up for it. You'll have to pay this penalty for as long as you have Part B. Once you've missed your first deadline for joining Part B, you will have to wait until the General Enrollment Period (from January 1 to March 31) to enroll in Part B. Coverage will start on July 1 of that year. What if I sign up inside 12-months from when my initial enrollment period ended? So long as a 12-month period from March 31st has not passed before coverage is obtained then you will not owe a penalty. Here are two examples: If your initial enrollment period ends on the last day of May 2018 and you obtain coverage on January 1st, 2019, you will have been without coverage for 10 months (June 1, 2018 – March 31, 2019 = 10 months). You will not be penalized. If your initial enrollment period ends on the last day of February 2018 and you obtain coverage on January 1st, 2019, you will have been without coverage for 13 months (March 1, 2018 – March 31, 2019 = 13 months). You will have a 10% monthly penalty added to your Part B premium for the rest of the time you are on Medicare Part B. Will I be penalized if I retain group health coverage from my employer? Not necessarily, as long the coverage is equal in benefit to Original Medicare. Once you lose this coverage, you are entitled special enrollment period to sign up for Part B without penalty. What if I have private insurance? Individual health coverage is not considered creditable coverage to avoid a penalty. You will be assessed a penalty if you do not obtain Part B coverage 12-months from your IEP. Do these rules apply if I am eligible for Medicare due to disability? Yes. The Part B penalty clock starts on the first of the month after your Initial Enrollment Period ends. If you have coverage from a group health plan by a spouse or family member your deadline begins after employment ceases. If for some reason you incur a penalty for not having signed up for Part B, the clock resets when you turn 65 and you will no longer have to pay the penalty. What if am living abroad when I turn 65? If you live outside the United States after you turn 65, and you or your spouse are not working, the penalty clock starts ticking at the end of your IEP. If you are working and have group health coverage, then same rules apply for when you lose this coverage. If you are covered by the national public health system of the country where you live, you will have an SEP upon your return to the US. To learn more about late enrollment penalties, contact a Licensed Sales Agent at info@medicareissimple.com.