If you were without Part D or creditable drug coverage for more than 63 days while eligible for Medicare, you may face a Part D late enrollment penalty (LEP). The purpose of the LEP is to encourage Medicare beneficiaries to maintain adequate drug coverage. The penalty is 1% of the national base beneficiary premium ($32.74 in 2020) for every month you did not have Part D or certain other types of drug coverage while eligible for Part D. This amount is added to your monthly Part D premium.
Eliminating the Part D LEP
For most people, you have to pay the LEP as long as you are enrolled in the Medicare prescription drug benefit. There are some exceptions:
- If you receive Extra Help, your penalty will be permanently erased
- If you are under 65 and have Medicare, your LEP will end when you turn 65
- If you qualify for a state pharmaceutical assistance program (SPAP), it may pay your penalty for you
Appealing the LEP
Everyone has the right to file an appeal with MAXIMUS regarding their LEP determination. MAXIMUS is the company contracted by Medicare to handle these appeals. You can appeal the penalty (if you think you were continuously covered) or its amount (if you think it was calculated incorrectly). You should complete the appeal form you received from your plan, attach any evidence you have, and mail everything to:
MAXIMUS Federal Services Fax: 585-869-3320
3750 Monroe Avenue, Suite 704 Toll free fax: 866-589-5241
Pittsford, NY 14534-1302 Customer Service: 585-348-3400
If you don’t have an appeal form from your plan, you can also use this form.
Unfortunately, being unaware of the requirement to have prescription drug coverage is unlikely to be a successful basis for your appeal. However, the following are good reasons to appeal and may result in the elimination or reduction of your penalty:
- You have Extra Help
- You had creditable drug coverage during some or all of the time period in question
- Call your former plan and ask for a letter proving that you were enrolled in creditable drug coverage. Make sure to attach this letter to your appeal form. Your employer or union may also be able to confirm the fact that you had creditable drug coverage.
- You had non-creditable drug coverage, but your or your spouse’s employer or insurer told you it was creditable or didn’t inform you that it was non-creditable
- You were ineligible for Medicare’s prescription drug plan (e.g., if you were living outside the U.S. or incarcerated)
- You couldn’t enroll into creditable drug coverage because of a serious medical emergency
The appeal deadline is 60 days from the date you received the letter informing you about the penalty. If you miss this deadline, you can write a letter explaining why you had good cause, or a good reason—like serious illness—that prevented you from appealing on time. Attach this letter to your appeal. Once your appeal is submitted, you can expect a determination from MAXIMUS within 90 days. In the meantime, pay the LEP to your plan along with your premium. If your appeal is successful, your plan has to pay you back for the LEP payments you made while your appeal was pending.