Dear Marci,
I turned 65 last year but didnāt sign up for Medicare Part B right away, because I am still working and have employer-sponsored health insurance. A friend mentioned that I might have to pay a late enrollment penalty since I missed my Initial Enrollment Period. Is this true?
Nereyda (Montclair, NJ)
DearĀ Nereyda,Ā
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 aĀ Special Enrollment Period (SEP). The SEP allows you to sign up for Part B anytime while you are still covered by the employerās health plan or within eight months after your employment-based coverage ends. If you enroll during this period, you wonāt owe an LEP.Ā Ā
Even though it sounds like you shouldnāt owe a Part B LEP, it can be helpful to know how these penalties work. Here is some additional information about LEPs:Ā
1. Part B late enrollment penaltyĀ
You may owe aĀ Part B LEPĀ if you delay enrolling in Medicare Part B after you are first eligible. For each 12-month period you delayĀ enrollment,Ā you will owe a 10% Part BĀ premium penalty. So, if you delay enrollment for 24 months, you will owe the normal premium amount for Part B, plus an additional 20%.Ā Ā
However, you shouldnāt owe an LEP if:Ā Ā
- You haveĀ insurance from your or your spouseās current workĀ 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)Ā
- You are eligible for aĀ Medicare Savings Program (MSP)Ā Ā
- You qualify for a Special Enrollment Period (SEP) because of exceptional circumstances.Ā
2. Part D Late Enrollment PenaltyĀ
You may owe anĀ Part D LEPĀ if you delay enrolling in Medicare Part D after you are first eligible for it. For each month you delayĀ enrollment, 1% of the Part D base premium is added to your regular Part D premium.Ā Ā
However, you shouldnāt owe an LEP if:Ā
- YouĀ hadĀ creditable drug coverageĀ during the time you delayed enrolling in Part DĀ
- You qualify for theĀ Extra Help programĀ
- You canĀ prove that you received inadequate or inaccurate information about whether your drug coverage was creditable.Ā Ā
Most people donāt owe a premium for Part A because of their or their spouseās 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 theĀ MedicareĀ website to find out more about Part A LEP.Ā
Hope this helps!Ā Ā
ā Marci