Medicare’s Special Enrollment Period
Medicare’s Special Enrollment Period (SEP) is important for anyone who maintains active group coverage at age 65 or older and doesn’t enroll in Part B at age 65. The Special Enrollment Period is used to transition on to Medicare Part B. Sole proprietors are not eligible for a Special Enrollment Period and should transition onto Medicare Part A and Part B during their Initial Enrollment Period.
There is no need for someone who has transitioned on to Medicare A and B during their Initial Enrollment Period to read this information or watch the video. The Special Enrollment Period is only relevant to those who are not yet on Part B because they have active group coverage through their work or a spouse’s employment.
Plan to be on Medicare Part A before planning a transition onto Medicare Part B because you need your Medicare number for the application. Remember, if you are eligible for premium-free Medicare Part A, you can enroll in Part A at any time unless you are on a plan with a health savings account and want to contribute to the account. Medicare Part B enrollment rules, however, are strict and punitive and involve LIFETIME PREMIUM PENALTIES so you must follow those rules in order to avoid a gap in coverage and/or premium penalties.
For those with active group coverage at 65 or later, the Special Enrollment Period begins three months after the month of one’s 65th birthday, when the Initial Enrollment Period ends. The Special Enrollment Period continues as long as one has active group coverage and ends eight months after one’s employment ends or the group coverage associated with the job ends, whichever comes first. I am LOATHE to even mention the eight months because almost everyone needs to plan for the group coverage to end at the end of a month and Medicare and related products to be in place the next day.
The most common reason we see associated with missing a Special Enrollment is electing COBRA. COBRA rarely makes sense for anyone 65 or older. If this is confusing to you, please watch our previously issued video on COBRA. At any rate, please do not take COBRA as a bridge between the group coverage ending and the transition to Medicare.
Historically the process used during a Special Enrollment Period to transition to Medicare Part B was a paper process. COVID-19 has changed the process somewhat for now. The most straightforward way to use the SEP to transition onto Medicare Part B is to have every employer who provided coverage at 65 or older complete a CMS-L564 (attached below). Prior to the pandemic, we advised individuals to complete a CMS-40B (also attached below) and obtain a completed CMS-L564 and hand-deliver both to one’s local Social Security office. The recommendation for hand delivery was based on our experience that the forms were occasionally misplaced even when sent with tracking but were never lost when hand-delivered. Due to the pandemic, however, Social Security is closed to in-person traffic so forms can’t be hand-delivered. For now, one uses the portal at https://secure.ssa.gov/mpboa/medicare-part-b-online-application to enter the information formerly requested in form 40B and to upload the CMS-L564 forms. You must have access to your MySocialSecurity portal found on ssa.gov in order to use this process. You can also download these forms here:
After you have successfully completed this process, you want to track progress to verify the enrollment. This can be done through the MySocialSecurity portal or mymedicare.gov portal. If you don’t see the Part B enrollment showing as effective in two weeks, contact your local Social Security office by phone and/or fax the CMS-L564 to the local Social Security office with a completed CMS-40B and a cover memo.
The Medicare Part B enrollment is critical because you need Part B in effect to apply for a Medicare Supplement or Advantage Plan.
Our advice is to apply for Part B the first of the month before the month you want the coverage to be in place. If you apply earlier, you may get an earlier Part B effective date than you actually need. Some people are willing to pay their contribution to the group plan and to have Part B in effect earlier than they need it just in case there are problems with the enrollment. That’s fine too. Of course, you can apply for Part B at any time during the SEP should you want that coverage secondary to the group. Medicare will be a secondary source of coverage if your employer has 20 or more employees. As discussed previously, many people with coverage through a group of under 20 employees must be on Medicare Part A and Part B and Medicare is primary.
Many people postponed their retirement during the pandemic and a very popular retirement date is December 31st which is upon us. Because those individuals planning to retire at the end of a calendar year are managing a Special Enrollment transition during Medicare’s Annual Enrollment Period when millions of people can be changing plans, there is more potential for glitches. Please be vigilant.
We thank all those who worked beyond age 65 and continued to pay into Social Security and Medicare! The government thanks you by making the system very punitive if you don’t transition correctly so please, please be conscientious. If the Special Enrollment Process isn’t managed correctly one has to use the General Enrollment to transition to Medicare Part B and that usually means a gap in coverage and lifetime premium penalties.
Please watch the video and enjoy your day. Thanks.