Late medicare enrollment if you switch from insurance

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paulsiu
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Late medicare enrollment if you switch from insurance

Post by paulsiu » Tue Nov 11, 2014 11:30 pm

My over 65 in-laws used to be on what is term "pension" insurance. I don't think that's the proper term for it, but it's health insurance provided by their former employers as part of their retirement package. Recently, they have been told that their insurance was ending and they hire a firm to help them transition to a medicare. The rep told them that they may be subject to a late enrollment penalty because they didn't sign on with medicare at 65. I was like ????

To my knowledge, if you turn 65, you sign up for Part A. but if you have your own insurance, you can defer signing up for part B if you have an "equivalent" insurance. My mom didn't sign up until 70 and never paid a penalty. I just had to have the former insurance send the new insurance proof that she had insurance.

I mentioned this to my in-laws, but they said the rep told them that may only apply to insurance for people who are working, not pension insurance. I never thought that there was a difference! Is the rep right or just unprepared?

Paul

Professor Emeritus
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Re: Late medicare enrollment if you switch from insurance

Post by Professor Emeritus » Wed Nov 12, 2014 5:52 am

It is a MAJOR issue for retired federal employees and real PITA. You get hit with the the penalty even if you are fully insured but not working.

dbr
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Re: Late medicare enrollment if you switch from insurance

Post by dbr » Wed Nov 12, 2014 9:20 am

All I know is that when Medicare time came around I did not imagine for a second that retaining any form of what was offered by my employer was going to work and I jumped to Medicare/Medigap at the start. In the sequel they discontinued the employer "secondary" coverage and they discontinued the spousal coverage even for spouses under age 65. During all of this they made a pretty hard sell to stay on employer policies and then they tried to "place" people in Medicare/Medicare Advantage Plans. What they have done is offer a retiree Health Care Reimbursement Account that ends up covering about 2/3 of the Medigap premium for myself and my wife. If that goes away, I will have considered it a free gift anyway.

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Hexdump
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Re: Late medicare enrollment if you switch from insurance

Post by Hexdump » Wed Nov 12, 2014 10:38 am

I think that I am remembering these events correctly.

At the time that I retired at age 65 in 2004, my wife continued to work and I was covered on her policy.
I registered for Medicare parts A & B and then cancelled Part B. The premiums on her policy were paid by the company.
After she changed employers, the company would pay the premiums for the employee but not the spouse.
This was in 2009 and at that time I filed for Part B and was not charged any penalty.
I seem to remember having to fill out a lot of forms and get some difficult signatures to the effect that I had been covered and that the policy was in compliance with SSA guidelines.

It all worked out well other than raising my blood pressure due to all the bureaucratic nonsense.

Best of luck

Boats day
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Re: Late medicare enrollment if you switch from insurance

Post by Boats day » Wed Nov 12, 2014 11:00 pm

Unfortunately this is the law. I had credible coverage but once you retire it doesn't matter . Law says u pay the late fees. I wrote to my senator and response was too bad so sad that the law.

Saving$
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Re: Late medicare enrollment if you switch from insurance

Post by Saving$ » Wed Nov 12, 2014 11:17 pm

It appears the only way you can avoid the Part B and Part D penalty is either by enrolling at 65 or, if you don't enroll, if you are continuously employed and are covered by your employers group policy, for which you can obtain a "credible coverage" letter.

likegarden
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Re: Late medicare enrollment if you switch from insurance

Post by likegarden » Thu Nov 13, 2014 8:14 am

I always thought that you had to pay part B Medicare, did that for me and my wife. Since someone mentioned here, we just had our (former) employer medical plan terminated, have now a premium reimbursement account via a private exchange and just signed up for a Medicare Advantage plan through that exchange. We are happy with that, are actually saving money.

lululu
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Re: Late medicare enrollment if you switch from insurance

Post by lululu » Thu Nov 13, 2014 8:30 am

Boats day wrote:Unfortunately this is the law. I had credible coverage but once you retire it doesn't matter . Law says u pay the late fees. I wrote to my senator and response was too bad so sad that the law.
Wow I had no idea. I knew you have to have insurance to avoid the late signup penalty, but nowhere do I recall seeing that you also had to be working. This is a major trap, I think.

Lucky for me I did not touch the Medicare Advantage type plan my former employer was hawking.

JustCurious304
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Re: Late medicare enrollment if you switch from insurance

Post by JustCurious304 » Sat Nov 15, 2014 10:48 pm

The Medicare options can be very confusing. The best thing to do is call Medicare at 800-633-4227. You can call them 24/7. Or look at their website. I'm going for individual Medicare counseling in a few days as I want it taken care of before enrollment ends on Dec. 7th (for most people).

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GerryL
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Re: Late medicare enrollment if you switch from insurance

Post by GerryL » Sun Nov 16, 2014 1:07 am

Medicare is super confusing. There are tons of relevant books and websites and magazine articles, and if you want to make a hobby out of learning about it, you could fill up all of your free time. (I filled up a good portion of my pre-retirement sabbatical trying to work out the angles even though I had already been reading up on it for a year.) But if you don't know the questions you need to ask, you can still get messed up. I will again recommend the book Medicare for Dummies. No, I'm not getting a cut of the royalties. I just think it does a good job of explaining many aspects of this very complicated program -- actually set of programs.

From page 94, Table 6-1 Situations that Affect Part B Enrollment Deadlines:
Your situation: You're covered by retiree health benefits from your or your spouse's ex-employer.
Can you delay Part B and sign up during a special enrollment period (SEP)?: No.

From same chapter:
"To avoid late penalties, you should use your IEP (initial enrollment period) to sign up for Medicare Part A and Part B in the following circumstances:
...
"You've stopped working but have no health insurance from your current spouse's job (even if you have retiree benefits or COBRA extension coverage from your former employer; these don't count as employer coverage)."

Topic Author
paulsiu
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Re: Late medicare enrollment if you switch from insurance

Post by paulsiu » Mon Nov 17, 2014 12:25 pm

I did some further research:

http://www.medicareinteractive.org/page ... ript_id=20

Based on what I can determine, if you are working and on your employer's insurance. As long as your insurance is considered primary (some insurance forces you to make medicare primary upon turning 65) and is equivalent to Medicare in terms of benefits. In my mom's case, she worked until 70 and was my her employer's insurance which was primary and equivalent. When she turned 65, I worked with both the insurance and Medicare to see if she needed to sign up for Part B. They indicated that she did not. She continued to work until 70 and when she quit, i signed her up for medicare part B and had her old insurance sent medicare proof that she had insurance. All was well.

The murky area comes if you have what is term "Retiree" insurance. Apparently, these insurance are often secondary to medicare and serve the same role as medigap. When my in-law turned 65, they went to medicare and ask if they needed to sign up for part B and they were told that they did not because they still have retiree insurance. It was perhaps bad advice. They are currently asking their insurance to send medicare proof of insurance so they can sign up. I have asked them to figure out who they talk to in case this doesn't work and they get a penalty.

Paul

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