B Late Enrollment Penalty
If you delay enrollment in Part B and don’t have coverage from a current employer , you’ll be subject to a late penalty when you eventually enroll in Part B. For each 12-month period that you were eligible for Part B but not enrolled, the penalty is an extra 10% added to the Part B premiums. And you’ll pay this penalty for as long as you have Part Bwhich generally means for the rest of your life.
In 2020, most Medicare Part B enrollees pay $144.60/month. So a person who is now enrolled but had delayed their enrollment in Medicare Part B by 40 months would be paying an extra 30% in addition to those premiums . That means they’d be paying roughly an extra $43/month for their Part B coverage, for a total of about $188/month.
Part B premiums generally change each year. Sometimes they stay the same from one year to the next, but the general trend has been upwards over time. So the part B penalty will generally also increase from one year to the next. If you’re paying 10% or 30% or 50% more than the standard rates, the dollar amount of that penalty will increase as the standard premiums increase over time.
Do I Have To Sign Up For Medicare If I’m 65 Or Older And Still Working
If you’re age 65 or older, eligible for Medicare, and have insurance through your current job or your spouses current job, you need to make some important Medicare enrollment decisions.
If you don’t enroll on time, you may have to pay a penalty. Before you make any changes, it’s good to understand how your current coverage works with Medicare about four to five months before you become eligible for Medicare.
When you retire or if you lose your employer coverage, you will get a Special Enrollment Period to sign up for Medicare. Be sure to review the rules carefully, so you don’t miss deadlines.
Note: If you have a Health Savings Account, you and your employer should stop contributing to it 6 months before you sign up for Medicare Part A to avoid an IRS tax penalty. As well, before you enroll in Medicare while still working, check with your employer to see if their employer group health plan coverage for prescription drugs is creditable coverage. If it is not creditable, you could face paying Medicare Part D penalties later on.
Your First Chance To Sign Up
Generally, when you turn 65. This is called your Initial Enrollment Period. It lasts for 7 months, starting 3 months before you turn 65, and ending 3 months after the month you turn 65.
Avoid the penaltyIf you miss your 7-month Initial Enrollment Period, you may have to wait to sign up and pay a monthly late enrollment penalty for as long as you have Part B coverage. The penalty goes up the longer you wait. You may also have to pay a penalty if you have to pay a Part A premium, also called Premium-Part A.
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The Short Answer: It Depends
This article was updated on April 9, 2018, and originally published on July 16, 2017.
The standard eligibility age for Medicare in the United States is 65. However, many people don’t know if they need to sign up for Medicare if they already have other health insurance coverage, such as through a job, a spouse’s employer, from their former employer, or through COBRA. Here’s a quick guide that can help you determine if you need to sign up for Medicare when you turn 65 or if you can wait longer without paying a penalty.
Enrollment In Medicare Advantage And Part D
Unlike Original Medicare, there is no option for automatic enrollment with these plans. For Part D, you can enroll during the Annual Enrollment Period from October 15th through December 7th if you miss your IEP.
For enrollment in a Medicare Advantage plan , you can also use the same Annual Enrollment Period.
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Signing Up For Medicare
Follow the steps below if you need to actively enroll in Medicare.
If you decide to enroll in Medicare during your Initial Enrollment Period, you can sign up for Parts A and/or B by:
- Visiting your local Social Security office
- Mailing a signed and dated letter to Social Security that includes your name, Social Security number, and the date you would like to be enrolled in Medicare
- Or, by applying online at www.ssa.gov
If you are eligible for Railroad Retirement benefits, enroll in Medicare by calling the Railroad Retirement Board or contacting your local RRB field office.
Keep proof of when you tried to enroll in Medicare, to protect yourself from incurring a Part B premium penalty if your application is lost.
- Take down the names of any representatives you speak to, along with the time and date of the conversation.
- If you enroll through the mail, use certified mail and request a return receipt.
- If you enroll at your local Social Security office, ask for a written receipt.
- If you apply online, print out and save your confirmation page.
Sign Up: Within 8 Months After You Or Your Spouse Stopped Working
Avoid the penalty & gap in coverageIf you miss this 8-month Special Enrollment Period, youll have to wait to sign up and go months without coverage. You might also pay a monthly penalty for as long as you have Part B. The penalty goes up the longer you wait to sign up. How much is the Part B late enrollment penalty?
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Medicare Mythbuster: ‘i Must Enroll In Medicare At Age 65’
Sample Medicare Card
Many people thinking about Medicare enrollment experience stress. Adding to that stress is a variety of Medicare myths and misunderstandings. Perhaps one of the biggest myths is I must enroll in Medicare at age 65, no matter what.
Lets look at a few facts of Medicare enrollment.
Fact #1: Those who are already receiving Social Security benefits before age 65 will be enrolled in Medicare automatically when they turn 65. They do not have to do anything they will get their Medicare card in the mail.
Depending on the type of coverage one has, suspending Part B, medical insurance, in this situation, might be advantageous.
Fact #2: Those who plan to enroll in Social Security at age 65 must also enroll in Medicare.
In both cases , enrollment in Medicare, at a minimum Part A, hospital insurance, is required because it is a condition of receiving benefits. If you dont want Medicare, then you cant get Social Security.
Fact #3: Those who do not plan to enroll in Social Security at age 65 and who have an employer group health plan, be it as the employee or a dependent, can delay enrolling if the coverage meets two criteria:
A company with 20 or more employees sponsors the group health plan, and
The owner of the policy is still working.
When its time to retire, these individuals can qualify for a special enrollment period. They can enroll in Medicare, without delay or penalty.
Social Security Disability And Medicare
A person may have a disability that restricts their ability to work. People with these disabilities may often qualify for Social Security or Railroad Retirement Board benefits.
Once a person has received these benefits for 24 months, they can start a Medicare plan, even though they are under 65 years of age.
A person with a disability may otherwise have difficulty getting health insurance, as a private insurer may charge them higher premiums due to pre-existing medical conditions.
As a result, Medicare provides a more cost-effective coverage option for people who have disabilities.
Examples of disabilities that may qualify a person for Social Security or RRB benefits include:
- back injuries and other musculoskeletal issues
- bleeding disorders
- heart conditions, including congestive heart failure
- mental health disorders, such as depression
- sensory issues, such as vision loss
- speech disorders
- severe respiratory illnesses, such as COPD
Medicare has specific criteria for children under the age of 18 years who wish to claim disability benefits or enroll in Medicare.
The SSA does not pay disability benefits to a young person until they reach 18 years of age. Therefore, a person with a disability does not qualify for Medicare until they are 20 years of age.
An exception to this rule applies to people who are 18 years of age and have ALS. They qualify for Medicare benefits once they reach this age.
Those with ESRD can qualify for Medicare if they meet the following criteria:
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Enroll In Medicare Part B Depends
Medicare Part B charges a premium, so if you can delay without penalty, you may want to. Most people pay the standard Part B premium, but people with higher incomes may pay more.
Some people who work past 65 and have employer coverage delay enrolling in Part B just to postpone paying the premium and then sign up later during a Special Enrollment Period.
If you dont qualify for a Special Enrollment Period, even if youre still going to work past 65, you need to get Part B during your Initial Enrollment Period to avoid financial penalties.
What If I Get Health Coverage From Cobra Or Another Plan
You still need to sign up for Medicare during your initial enrollment period. You can delay signing up for Medicare only if you have insurance through your own or your spouses current employer.
If you or your spouse is not an active employee, you cant delay Medicare enrollment without penalty after leaving the job, even if you continue coverage on your employers plan through COBRA. The federal Consolidated Omnibus Budget Reconciliation Act of 1985 requires employers with 20 or more employees to let them continue health insurance coverage for up to 18 months, or up to 36 months for certain disabled individuals and family members, after they or their spouse leaves their job.
But Medicare becomes your primary coverage when you turn 65, and the COBRA coverage is secondary. This is another case where you could face big coverage gaps if you dont sign up for Medicare at the proper time.
Retiree health insurance benefits from a former employer function the same way, even if youre working in another job. You or your spouse must be actively working for the employer that now provides your health insurance if you want to delay Medicare enrollment and qualify for a special enrollment period later.
Keep in mind
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Can A 62 Year Old Get Medicaid
Yes. Medicaid qualification is based on income, not age. While Medicaid eligibility differs from one state to another, it is typically available to people of lower incomes and resources including pregnant women, the disabled, the elderly and children.
Learn more about the difference between Medicare and Medicaid.
Act Quickly If You Want A Medicare Advantage Or Part D Plan When You Retire
When you work past 65 and qualify for a Special Enrollment Period, there is one tricky thing to note about this time period. The Special Enrollment Period lasts 8 months, but you only get the first two months to enroll in a Medicare Advantage or Part D plan.
Many people get tripped up by this because they do get the full 8 months to get Part A and Part B. And this is even trickier when you consider that you need both Parts A and B to get a Medicare Advantage plan, and either Part A or Part B to get a Part D stand-alone plan.
TIP: Enroll in everything you want and need within the first two months of your Special Enrollment Period to ensure you dont accidently get hit with financial penalties for Part D.
Another good reason to enroll in the first two months is that it can take some time for plans to process your application. Make your decisions and enroll early to avoid a lapse in coverage.
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Why You May Consider Signing Up For Medicare At 65
If youre approaching age 65 and are not going to keep working, you have employer coverage from an employer with fewer than 20 employees, or your spouses employer requires you to get Medicare to stay on their health plan, then you need to enroll during whats known as your Medicare Initial Enrollment Period . If you dont, youll likely face financial premium penalties for enrolling late.
Your IEP is a 7-month window that generally includes the month of your 65th birthday, the 3 months before and the 3 months after For example, if your 65th birthday is on June 20, then your IEP starts on March 1 and ends on September 30.
This is the time to learn about your Medicare coverage options and get what you do or dont need coverage for. Most who have to get Medicare at age 65 will get Part A , Part B and some form of prescription drug coverage through either a stand-alone Part D plan or a Medicare Advantage plan.
Depending on your situation such as if you still have or want to keep employer coverage you may not need every part of Medicare available. But keep in mind here a simple rule: If you are not eligible for a Medicare Special Enrollment Period you need to get Parts A, B and D when youre first eligible to avoid financial penalties. Also, if youre still working, its a good idea to check with your employer plan benefits administrator to see how Medicare might work with that coverage before making any final decisions.
Medicare Eligibility For People Under 62
There are a few exceptions for Medicare age limits that can allow people younger than 65 and under age 62 to enroll in Medicare.
- If you have ALS , you are immediately eligible for Medicare regardless of your age as soon as your Social Security or Railroad Retirement Board disability benefits begin.
- You may also qualify for Medicare if you have kidney failure that requires dialysis or a kidney transplant, which is known as end-stage renal disease .
- You may also qualify for Medicare at age 62 or any age before 65 if you receive disability benefits from either Social Security or the Railroad Retirement Board for at least 24 months.
If you qualify for Medicare under the age of 65 because of a disability, you might also qualify for a Medicare Advantage Special Needs Plan.
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Can You Sign Up For Medicare After Age 65
Hereâs the gist: you can decide not to sign up for Medicare, but if you donât have some kind of health coverage, youâll be penalized when you do eventually sign up.
If youâve had credible coverage, such as group health insurance through your employer, youâre free to sign up for Medicare with no penalties.
However, if you just chose to put it off for whatever reason, there will be a penalty on your monthly premium, which is 10% for each year that you could have had Part B but didnât sign up for it.
Again â no one likes penalties, so if youâre confused or just want to make sure you have it figured out, please ask our team to review your Medicare plan.
Questions To Ask Your Employer Benefits Manager Include:
- Will my health insurance change if I enrolled in Medicare? If so, how?
- How much is deducted from my paycheck for my employer health insurance?
- Do I have through my employer?
- How will my covered dependents be impacted if I choose to get Medicare?
This information will help you weigh your choices and decide whats best for you. You may decide to enroll in Medicare Part A, Part B or both. Or you may be able to and want to delay enrolling in Medicare all together until you retire.
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Turning 65 7 Common Questions About Medicare
More than 10,000 people will enroll in Medicare every day over the next 10 years
More than 10,000 people will enroll in Medicare every day over the next 10 years.
Are you one of them? Or do you know someone who is nearing this rite of passage?
It’s not as complicated as it may seem. Explore 7 common questions about how to get started with Medicare.
1. How do I enroll in Medicare? Is it automatic when I turn 65?
To enroll in Medicare, most people need to contact Social Security directly. Do this before your 65th birthday to avoid a lapse in health coverage.
Some people including early retirees receiving Social Security and those with Social Security disability or Railroad Retirement benefits are automatically enrolled in Medicare when they become eligible.
You can enroll online, at your local Social Security office, or by calling 772-1213 .
2. When do I have to enroll?
You have a seven-month window around your 65th birthday to enroll. This is called the Initial Enrollment Period.
After that, you can still enroll in Medicare, but you may have to wait for a designated special/general enrollment period to do so. Learn more about when to join.
3. What if Im still working and have insurance? Do I need to enroll at age 65?
If you are working past age 65 and have insurance from your job , you should contact your plan and review how your coverage will change before deciding whether you need to enroll in Medicare now.
4. Does Medicare cover ____________?