What’s (Not) New?
Enrolling in Medicare Part B at the right time is still a challenge many can get wrong. One key is to understand how Medicare B and employer coverage relate to each other.
If you have employer health care coverage, it is very important to determine whether you can delay applying for Part B without repercussions. The penalties can be very harsh if you don’t apply on time.
Contributing to the problem is that there is no formal notice about enrolling in Part B, or how to use the Part B Special Enrollment Period (SEP). There are also many misunderstandings around Medicare’s coordination of benefits rules when people have other types of health insurance coverage separate from Medicare.
What is Part B Special Enrollment Period (SEP)?
An individual may enroll in Medicare outside the regular enrollment periods only in certain circumstances. If you qualify for one of these special cases, the period for you to enroll is known as the Medicare Special Enrollment Period (SEP).
If you qualify for the Medicare Special Enrollment Period, you can enroll in Medicare outside of your Initial Enrollment Period (IEP) and the General Enrollment Period (GEP). This means that you may delay your decision to enroll in Medicare Part B without having to wait for the General Enrollment Period and without having to pay the 10% premium penalty for late enrollment.
Note: there is a 10% premium penalty for late enrollment!
Who is eligible for Part B SEP?
To be eligible for Part B SEP you must answer YES to ALL of the following questions:
· Are you eligible for Medicare due to age or disability? (If you are eligible due to End-Stage Renal Disease, you are not entitled to an SEP.)
· When you first became eligible for Medicare, were you enrolled in either Medicare Part B, or an employer group health plan based on your current employment, or the current employment of a spouse or other family member? (If you did not have any health coverage or you had only retiree coverage or COBRA when you first became eligible for Medicare, you are not entitled to an SEP.)
· Have you been continuously covered either by Medicare Part B, or by an employer group health plan based on your current employment, or the current employment of a spouse or other family member since you became eligible for Medicare until now, with no more than eight consecutive months of lapses in coverage? (A lapse in coverage is a period of time when you have neither Medicare Part B nor group health coverage based on current employment. For example, if you only had COBRA or retiree coverage at any time since you became eligible for Medicare, this is considered a lapse in coverage. If your lapse in coverage exceeded eight consecutive months, then you are not eligible for an SEP.)
If you answered YES to all three questions above, then you are usually eligible for the Special Enrollment Period (SEP).
If you answered NO to any of the above questions, you are not eligible for a SEP and may have to wait for the next General Enrollment Period to enroll in Medicare Part B. You may also incur penalties if you did not sign up on time.
We know this process can be confusing, and potentially costly. For help managing this process, or if you have any other questions related to Medicare, please visit Trusty.care to ask us anything about your Medicare plan.
What does “current” employment mean?
Understanding “current” employment is imperative to getting Medicare enrollment right and avoiding the Part B enrollment pitfalls. For Medicare Part B enrollment rules, “current” employment is a status for people who are actively working and receiving employer coverage. People who are not actively working and continue to receive employer coverage would not meet the criteria for the Part B SEP .
What if I have other types of health insurance such as COBRA or retiree insurance?
The uncertainty about when to enroll in Medicare is magnified in situations where people who are eligible for Medicare have other types of health insurance coverage. Many beneficiaries do not know that retiree coverage with few exceptions is almost always secondary to Medicare.
Health insurance coverage provided through the Consolidated Omnibus Budget Reconciliation Act or COBRA is also always secondary to Medicare coverage.
Hence, people with retiree coverage or COBRA will need to enroll in Medicare in order to have primary health insurance coverage. People with retiree coverage or COBRA who fail to enroll in Medicare will end up without a primary health insurance payer.
In some cases, people may slip through and go unnoticed while the secondary health insurance erroneously continues to pay primary. Beneficiaries may be informed of this employer error only after they have incurred high medical costs. When this happens, Medicare-eligible beneficiaries run the risk of the insurer recouping all payments made to providers.
As always, for help managing registration or changes related to your Medicare plan, or if you have any additional questions, please visit Trusty.care to ask us anything about your Medicare plan.
By Gus Smith
Trusty.Care, your trusted partner for all your Medicare decisions
Medicare mistakes can have severe financial and healthcare consequences, especially when you miss a deadline or sign up for the wrong plan. The streamlined Trusty.care platform helps you easily identify and sign up for the right plan, and optimize your health coverage for life.