Steven turned 65 three years ago and decided to not enroll in Medicare Part B during his Initial Enrollment Period (IEP) because he was covered by his employer’s health insurance. He is 68 now and is retiring from his job at the end of the month. As a result, he is losing his coverage through his employer and wants to enroll in Part B. He had read that enrolling late in Part B will result in coverage gaps and penalties.
Can Steven enroll in Part B? Will he have to pay a late enrollment penalty (LEP) and face gaps in coverage?
What To Do:
Yes, Steven can enroll in Part B. He will not have to pay a late enrollment penalty or face gaps in coverage.
Steven has a Special Enrollment Period (SEP). SEPs are periods of time outside of normal enrollment periods that are triggered by specific circumstances. In Steven’s case, he is eligible for a Part B SEP.
What is a Part B SEP?
The Part B SEP is the time during which you can enroll in Medicare Part B without penalty or waiting for the General Enrollment Period (GEP). The Part B SEP starts when you have coverage from current work (job-based insurance) and you are in your first month of eligibility for Part B. It ends eight months after you lose coverage from current employment, because the employment or insurance ends. In order to qualify for the Part B SEP, two criteria must be met:
- You must have insurance from current work (from your job or your spouse’s job) or have had such insurance within the past eight months
- You must have been continuously (no gap longer than eight months) covered by job-based insurance or Medicare Part B since becoming eligible for Medicare, including the first month you became eligible for Medicare.
This means that if Steven had gone without employer coverage for more than eight months at some point after turning 65, he would no longer qualify for a Part B SEP.
Steven has an eight-month period to enroll in Part B, starting from the month in which he loses his coverage through his employer. His Medicare coverage will begin the month after he enrolls.
Since Steven is retiring at the end of the month, he should enroll in Medicare Part B now so that his coverage starts next month and he avoids any gaps in coverage. If he does not enroll in Part B before the end of the month, he may be responsible for any health care costs he incurs in the months after losing job-based coverage and before his Medicare coverage starts.
To enroll using the Part B SEP, Steven should contact the Social Security Administration (SSA) at 800-772-1213 to request the proper forms. Steven’s employer will need to fill out a form confirming he was covered by job-based insurance, and Steven will need to fill out an application for Part B. Then he should submit his application by dropping it off at his local Social Security office or by sending it to their mailing address.
If Steven misses his Part B SEP and goes eight months without enrolling in Medicare, he may have to enroll during the GEP. The GEP takes place January 1 to March 31 each year, with coverage starting on July 1. Enrolling during the GEP will mean Steven may have to pay a late enrollment penalty, depending on the length of time he is without work based insurance. If Steven misses his Part B SEP and has to use the GEP to enroll in Part B, he should first learn if he qualifies for the Medicare Savings Program (MSP). If he qualifies, he can use the MSP to enroll in Part B outside of the GEP. Enrolling in the MSP would also eliminate any late enrollment penalty Steven may have incurred.