Medicare’s Initial Enrollment Period

Today we return to a discussion of enrolling in original Medicare, Parts A and B. Most Americans should transition to Medicare during the Initial Enrollment Period (IEP) that occurs around age 65. Again, the only people who do not have to consider enrolling in Medicare Parts A and/or B at this time are those with active group coverage through a group of 20 or more employees or those already on Medicare due to disability or serious illness.

Those who are entitled to Medicare due to serious illness or disability prior to age 65 are automatically enrolled in Medicare Parts A and B. Those who take Social Security prior to age 65 are also automatically enrolled in Medicare Parts A and B. Everyone else who wants Medicare when they are first eligible at age 65 must actively enroll.

The Initial Enrollment Period is three months before the month of one’s birthday, the month of one’s birthday and three months after the month of one’s birthday. If you want your Medicare to be effective as soon as you are eligible, you need to apply prior to the month of your birthday. Frankly, you should apply as soon as your IEP begins because you need to obtain your Medicare number from Social Security in order to apply for a private Medicare supplement, Advantage Plan or Part D Plan.

If you are applying on your own work record, the easiest and most efficient way to apply for Medicare is online through the Social Security website which is ssa.gov. If you are applying on a spouse’s or ex-spouse’s work record, you will need to call Social Security to make an appointment to enroll. Social Security may ask you to provide documentation such as marriage/divorce records or citizenship documentation if you are a naturalized citizen.

Remember that Medicare enrollment rules with respect to Medicare Part B are strict and unforgiving. If you don’t follow them, you may have to pay lifetime premium penalties. Medicare Part A for those who earned it through their work record, a spouse’s work record or a former spouse’s work record, is not punitive with respect to enrollment. However, you must enroll properly so that you have the protection of that coverage.

We have much more detailed resource material on our website at healthcarenavigation.com/education. If you are approaching your 65th birthday or are 65, and have active group coverage but are planning to retire, please consult that material.

COBRA

If you are on COBRA, a temporary extension of group coverage, and are turning 65, you should plan to transition on to Medicare. This is a very poorly understood issue even among human resources professionals. You are eligible for COBRA at age 65 and over if you are already enrolled in Medicare A and B when you are offered COBRA. COBRA is supposed to pay as secondary to Medicare. Finally, if you miss your IEP because you stayed on COBRA, you will likely have to enroll in Part B during the General Enrollment Period and possibly face a gap in coverage AND premium penalties.

Other Special Circumstances

If you are planning to retire around age 65, you must plan carefully because if you enroll during the IEP but wait to enroll during the month of your 65th birthday or later, your Part B effective date will be pushed out. Also, one is not eligible to use a Special Enrollment Period (only available for those with active group coverage), until their Initial Enrollment Period is over, i.e., three months after the month of your birthday.

If you continue to work and have active group coverage through a group of fewer than 20 employees, you are often required to enroll in Medicare Parts A and B. This typically depends on your state of residence and your Plan. Become familiar with your particular circumstance.

If you continue to work and have active group coverage through a group of 20 or more employees, you should consider whether to enroll in Medicare Part A. It is unlikely that Medicare Part A would be a significant source of coverage since it will be secondary to the group coverage. But there is value in having your Medicare number in hand so that your retirement and transition on to Medicare Part B will not be delayed should you desire to retire. If you are on a plan with a health savings account, however, you should not enroll in Medicare Part A if you want to continue contributions to a health savings account. As explained in a previous email, that is an IRS rule.

Other Decisions

In our view, it is never sufficient to only enroll in Medicare Parts A and B, original Medicare. In addition, you should have either a Medicare supplement and Part D plan or an Advantage Plan or other retiree medical. Enrollments are handled by different entities as follows:

Remember that there is almost always an exception to a rule that might bite you. For example, most but not all Advantage Plans include drug coverage. In our view, you also need a Part D Plan if you choose one of those Advantage Plans that does not include drug coverage. Know your situation.

Our next video will address problems we have seen people experience with Medicare’s Initial Enrollment Period. Please stay with us and please watch the video. Thanks.