Part B and D non enrollment penalties

[ukrkoz]

Here's my situation.
I am on my wife's insurance through a major hospital system. We pay around $50 deductible/month.
I shall turn 65 in June.
I work and have no intentions to stop until either my health tells me to or something else happens.
With our combined income, monthly premium for Part B will be close to $300/month. I didn't even look at Part D, likely will add up to $500 or so/month.
That makes it cost prohibitive to enroll in Part B and D, having good insurance coverage as is.
Yet, from quick read, there will be penalties for non enrollment. Sort of forcing me to either enroll and pay or, deal with penalties down the road when, say, I retire (SSI benefit will be rather insignificant) and income drops down, so B and D premiums become more palatable. (right)

So what exactly am I supposed to do? We considered signing up for Part A only, but it feels like we are forced to enroll into the rest of them of suffer penalties down the road.

Thank you

 

[MBSC]

The link below describes situations where a person can delay Medicare enrollment without penalty.

Medicare Enrollment Checklist: https://www.cms.gov/Outreach-and-Ed...ers-and-Unions/FS3-Enroll-in-Part-A-and-B.pdf

Based on the information provided, you should be able to delay Part B enrollment since you will be covered by a large employer group health plan after you turn 65. There are exceptions for certain non-profit organizations so it's always a good idea to check with the employer's human resources department to confirm.

Part D (drug) plan enrollment can also be delayed without penalty when the employer plan provides "creditable" drug coverage. The human resources department can also tell you if their plan meets this requirement (it should). Generally, you will still want to enroll in Part A when first eligible unless you will be contributing to an HSA after age 65.

(Pages 3-4 from the link above) Should I consider delaying enrollment in Medicare Part A and Part B?

You should always contact your employer or union benefits administrator before delaying Part A and Part B to find out how your insurance works with Medicare. Your employer coverage may require that you enroll in Part A and Part B in order to get your full coverage.

I have health insurance based on my (or my spouse’s) current employment, from an employer with 20 or more employees.

Your decision to enroll in Part A and Part B depends on whether you have a high-deductible health plan with a health savings account (HSA):

I do NOT have a Health Savings Account (HSA)

Part A: If you qualify for premium-free Part A, you should enroll in Part A when you turn 65. However, if you have to pay a premium for Part A, you can delay Part A until you (or your spouse) stop working or lose that employer coverage.

You will NOT pay a penalty for delaying Part A, as long as you enroll within 8 months of losing your coverage or stopping work (whichever happens first).

Part B: You can delay Part B until you (or your spouse) stop working or lose that employer coverage. This allows you to save the cost of your Part B premium. It also allows you to postpone your one-time “Medigap open enrollment period” until a later time, when you may want to purchase this type of coverage.

You will NOT pay a penalty for delaying Medicare, as long as you enroll within 8 months of losing your coverage or stopping work (whichever happens first).You’ll want to plan ahead and enroll in Part B at least a month before you stop working or your employer coverage ends, so you don’t have a gap in coverage.

Part D Enrollment: https://www.medicare.gov/drug-coverage-part-d/how-to-get-prescription-drug-coverage

If you decide not to get Medicare drug coverage when you're first eligible, you'll likely pay a late enrollment penalty if you join later, unless one of these applies:

* You have other Creditable prescription drug coverage.

 

[ukrkoz]

Thank you.
Very informative.
Do we need to do any forms or else? Have them reviewed by wife's HR and send to Medicare?
I can enroll into Part A online.
Technically, as I intend to work as long as I can and wife is running 3 years behind on her terms, we should be working for the next 5-8 years between the 2 of us.

 

[MBSC]

You do not have to complete any forms at this time. Just receive verbal confirmation from your wife's HR department that their drug coverage is creditable and verbal confirmation the group plan is primary to Medicare so you can delay Part B without penalty.

Then, each year the group plan will send you an annual letter of creditable coverage. It is very important to keep each letter as you will need to provide a copy of each letter when it does become time to enroll in Part D. These letters waive the Part D penalty.

When it comes time to enroll in Part B, you will need to let the Social Security office know you had group coverage. They will give you CMS form L564 and instruct you to have her employer complete it and return it to you. You will then take the completed form back to the SS office. This form waives the Part B penalty.

CMS Form L564: https://www.cms.gov/Medicare/CMS-Forms/CMS-Forms/Downloads/CMS-L564E.pdf

 

[ukrkoz]

Great!
Silly as it sounds, but does HR actually KNOW they have to send that letter out or, we need to remind them?

 

[MBSC]

Silly as it sounds, but does HR actually KNOW they have to send that letter out or, we need to remind them?

The group plan has your birth date on file and is required by law to send the notices to any member over 65 that is enrolled in the plan. You should only have to inquire about the letter if you don't receive it by mid-October of each year.

Notice of Creditable Coverage

What is it? You'll get this notice each year if you have drug coverage from an employer/union or other group health plan. This notice will let you know whether or not your drug coverage is “creditable.”

When should I get it? September

Who sends it? Employer/union plans

What should I do if I get this notice? Keep the notice. You may need it if you decide to join a Medicare drug plan later.

Source: https://www.medicare.gov/forms-help...-about-medicare/notice-of-creditable-coverage

Creditable Coverage

The Medicare Modernization Act (MMA) requires entities (whose policies include prescription drug coverage) to notify Medicare eligible policyholders whether their prescription drug coverage is creditable coverage, which means that the coverage is expected to pay on average as much as the standard Medicare prescription drug coverage. For these entities, there are two disclosure requirements:

The first disclosure requirement is to provide a written disclosure notice to all Medicare eligible individuals annually who are covered under its prescription drug plan, prior to October 15th each year and at various times as stated in the regulations.

This disclosure must be provided to Medicare eligible active working individuals and their dependents, Medicare eligible COBRA individuals and their dependents, Medicare eligible disabled individuals covered under your prescription drug plan and any retirees and their dependents.

The MMA imposes a late enrollment penalty on individuals who do not maintain creditable coverage for a period of 63 days or longer following their initial enrollment period for the Medicare prescription drug benefit. Accordingly, this information is essential to an individual's decision whether to enroll in a Medicare Part D prescription drug plan.

Source: https://www.cms.gov/Medicare/Prescription-Drug-Coverage/CreditableCoverage

 

[ukrkoz]

Thank you.
Can't give you more likes, so I'll send you some of my wife virtual pastries, she's famous for.