Dear Marci,
I turned 65 last year but didn’t 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)
Dear Nereyda,Â
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. Â
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:Â
1. Part B late enrollment penaltyÂ
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%. Â
However, you shouldn’t owe an LEP if: Â
- 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)Â
- You are eligible for a Medicare Savings Program (MSP) Â
- You qualify for a Special Enrollment Period (SEP) because of exceptional circumstances.Â
2. Part D Late Enrollment PenaltyÂ
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. Â
However, you shouldn’t owe an LEP if:Â
- You had creditable drug coverage during the time you delayed enrolling in Part DÂ
- You qualify for the Extra Help programÂ
- You can prove that you received inadequate or inaccurate information about whether your drug coverage was creditable. Â
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.Â
Hope this helps! Â
– Marci