Medicare election can be a daunting task for newly eligible seniors. If you’ve begun to research your options, you’ll know there’s an enormous amount of information out there, all of it technical and complex. Unfortunately, Medicare’s own 120 page handbook does little to simplify this information overload. With no simple class or program to prepare you to enroll at the proper time or make your options clear if you continue to work past 65, we watch newly eligible seniors make the same mistakes and end up subject to unnecessary penalties year after year at no fault of their own.
Cutting through the noise on your own is difficult, let me help explain the process. A common mistake I see far too often among new retirees is a failure to sign up for the appropriate coverage within your Initial Election Period (IEP). Your Initial Election Period is a seven month window – three months before your 65th birthday, your birth month, and three months following your 65th birthday. This time frame is when you would sign up for Medicare Part A (your hospital coverage) and Part B (your coverage for medical services like doctors, MRIs, and surgeries) via Social Security. Enrolling in both plans within your IEP is the easiest way to avoid unnecessary penalties.
If you continue to work past 65, the size of your employer determines whether you can delay enrolling in both Medicare Part B while remaining on your employer/union plan without facing a penalty. If you work at a company with less than 20 employees, you should not delay enrollment in Medicare Part B, even if you have group coverage. If you go 63 days without Medicare Part B coverage under these circumstances, you will then be subject to a lifetime 10% penalty on future Medicare Part B premiums for every 12 months that you did not have coverage. If you work for a company that has 20 or more employees, your group employer/union coverage is likely sufficient to delay your enrollment in Medicare Part B without facing a penalty. It is important to remember, however, that when you choose to retire, failure to enroll in Medicare Part B within the 63 day window I mentioned above will result in the same lifetime 10% penalty being assessed. In both instances, you will want to keep in mind that Medicare does not consider COBRA, retiree health plans, VA coverage, and individual health coverage through the Health Insurance Marketplace as coverage based on current employment. I recommend enrolling in Medicare Parts A and B under these circumstances.
Late enrollment in Medicare Part D (prescription coverage) presents the same threat of lifetime penalties. Once you’ve gone longer than 63 days without prescription coverage, you will be assed 1% of the average national cost of Medicare Part D plans monthly, for life. That current average sits just under $33 dollars. With the prospect of lifetime fees looming, you can see how important it is for you to make timely elections. Information from a subject matter expert is essential . Bayside Medicare helps seniors navigate this important process every day. We can help you avoid a costly mistake, and more importantly compare your group coverage to Medicare so you get the right fit for your medical needs. Stay safe and be well.
About Dayna Schafer
Dayna is a licensed, professional Medicare agent and broker, and a member of the Rise Community. Her agency is located in Saint Petersburg, FL where she has helped thousands of individuals and Medicare beneficiaries understand their benefits by ‘Making it Make Sense’. Since 2002, Dayna has certified with triple the average amount of insurers in an effort to relentlessly seek out the right fit for her client’s healthcare needs.