Will I have a late enrollment penalty?

Dear Nereyda, 

Great question! Since you are actively working and covered by your employer-sponsored health insurance, you can enroll in Medicare Part B without penalty using a Special Enrollment Period (SEP). The SEP allows you to sign up for Part B anytime while you are still covered by the employer’s health plan or within eight months after your employment-based coverage ends. If you enroll during this period, you won’t owe an LEP.  

Even though it sounds like you shouldn’t owe a Part B LEP, it can be helpful to know how these penalties work. Here is some additional information about LEPs: 

1. Part B late enrollment penalty 

You may owe a Part B LEP if you delay enrolling in Medicare Part B after you are first eligible. For each 12-month period you delay enrollment, you will owe a 10% Part B premium penalty. So, if you delay enrollment for 24 months, you will owe the normal premium amount for Part B, plus an additional 20%.  

However, you shouldn’t owe an LEP if:  

• You have insurance from your or your spouse’s current work and have been continuously covered since becoming Medicare-eligible (with no more than eight consecutive months without coverage from either Medicare or insurance from current work) 
• You are eligible for a Medicare Savings Program (MSP)  
• You qualify for a Special Enrollment Period (SEP) because of exceptional circumstances. 

2. Part D Late Enrollment Penalty 

You may owe an Part D LEP if you delay enrolling in Medicare Part D after you are first eligible for it. For each month you delay enrollment, 1% of the Part D base premium is added to your regular Part D premium.  

However, you shouldn’t owe an LEP if: 

• You had creditable drug coverage during the time you delayed enrolling in Part D 
• You qualify for the Extra Help program 
• You can prove that you received inadequate or inaccurate information about whether your drug coverage was creditable.  

Most people don’t owe a premium for Part A because of their or their spouse’s Social Security work history. If you do owe a premium for Part A, you could owe a Part A LEP if you delay enrollment. Visit the Medicare website to find out more about Part A LEP. 

Hope this helps!  

– Marci