Sign Up or Not Sign Up-
Most individuals turning 65 will have to enroll in Medicare, while others may delay it if certain conditions are met. Which one are you?
Some individuals elect to continue to work and are covered by their employer or their spouses. The size of the company matters as it dictates whether the coverage is considered creditable, meaning the coverage is as good if not better than Medicare’s.
If you have coverage from an-
Employer-
If your employer has over 20 employees, then the coverage is considered “creditable,” which means that it is as good if not better than Medicare, and you don’t have to sign up. Most people sign up for Hospital Part A because, for most people, it is Free, and Medicare will pick up what is not covered by the Employer plan. In this scenario, the Employer coverage is the Primary Payer, and Medicare is secondary. If you have an HSA, then it is advisable not to sign up because then your contributions become taxable. If your employer has less than 20 employees, then you will have to sign up, and in this scenario, Medicare will be the Primary payer, and the Employer coverage is secondary. Even if you don’t have to sign up it is a good idea to ask your Medicare Advisor (me) to do a comparison between getting on Medicare and keeping your current coverage. Some company plans have steep deductibles and are expensive.
State Health Exchange –
You will have to sign up for Medicare Parts A and B.
Union – It is advisable to connect with Human Resources because most unions require members to sign up for Medicare parts A and B when first eligible. Also, some Union retirement coverages come with premiums and deductibles so it is prudent to compare your coverage with a suitable Medicare Health Insurance plan. Care should be taken though because in most cases once the Union retirement coverage is forfeited you cannot re enroll in it.
Penalties–
Part A –
If you are entitled to Free Medicare Part A (All of those who were employed for 10 years or more), then you don’t have to sign up if you have creditable coverage. Most people who continue to work and have employer-provided insurance from a company that has over 20 employees sign up for Hospital Part A only and activate their Medical Part B later when they decide to retire. For those that have to pay for Part A, they will incur a penalty of 10% if they do not sign up when first eligible.
Part B –
Some individuals elect not to enroll in Part B because of the premium and do not have creditable coverage. If they let their initial 7-month window lapse, they will have to wait for the Part B enrollment period, which runs from 1/1 to 3/31 and has an effective date of the 1st of the following month. The penalty is an additional 10% for every year not enrolled.
Part D –
Some individuals who do not take medications decide against signing up for a Part D Drug plan because of the premium and have no creditable coverage. This is a big no-no. If they go 63 consecutive days without creditable Prescription Drug coverage, then the penalty will be 1% of the national monthly average premium(About $30) times the number of months they were without it added to their Rx plan monthly premium.
In short, the individuals who get penalties have nothing and do nothing. Keep in mind that there are $0 Premium Medicare Advantage Plans in your area that include Part D Prescription Drug Coverage.
Your Enrollment period for Medicare begins 3 months before the month of your birthday and continues through your birthday month plus another 3 for a total of 7 months. If you are definitely going to sign up, do it during the first 3 months to ensure it begins on the first day of your birthday month(Which is the earliest it can start). The choice to sign up or not depends upon your current coverage. If you are collecting Social Security you will be automatically enrolled in both Medicare Part A and Medicare Part B.
Frequently Asked Questions
I Don’t Take Medications, do I still have to get a Part D Drug Plan?
Yes, you must sign up for a Part D Drug Plan even if you don’t take Meds. It can be a Stand Alone Drug Plan or one embedded in a Medicare Advantage Plan(Part C).
I Signed Up For A Medicare Advantage Plan, Do I still need to Keep Medicare?
Yes, your Medicare Advantage Plan eligibility depends upon your Medicare Parts A and B being active. If not you could receive a penalty for Part B and Part D.
I Have Coverage From The VA, Do I Still Have To Sign Up For Medicare?
Yes, the VA coverage is not considered creditable (As Good or better than Medicare) for Medical so you will get a penalty for not signing up for Part B Medical coverage, but it is creditable for Medications so you can skip signing for a Part D Drug plan with no penalty.
If I Do Receive A Penalty, How Long Does It Last?
It will last as long as you are enrolled in Medicare.
Mike Miligi- Owner- Michael M Insurance Services
For over 10 years, Mike has been assisting Seniors and other Medicare-eligible individuals in understanding the ins and outs of Medicare and Medicare Health Insurance options, including Medicare Advantage Plans(Part C), Medicare Supplement Plans(Medigap), Prescription Drug Plans(Part D), and Dental and Vision programs.
Mike is Licensed in seven States and Certified with 11 Insurance Carriers. He has helped thousands of individuals decide on the best course of action for their particular Health Insurance needs. Because Mike is an Independent Medicare Health Insurance Broker, he works for the client, not the Insurance Carriers, and is able to provide his clients with accurate and unbiased Health Insurance options.
