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Retiring? And/or Going on to Medicare—It’s Complicated!

By Beth Cooper Ingle, CSA and
Steven A. Buttice
This is complicated and you cannot afford to make a mistake.  Are you over age 65 and still working or your spouse is still working and have Health Insurance through an Employer Group Health Plan (EGHP)?  If so, you may be able to delay enrollment in Medicare Part B.  Again, I said MAY.  The rules for allowing you to refuse Medicare Part B during your Initial Enrollment Period (IEP), because you have an EGHP, state you can sign up for Part B any month you continue to have the EGHP or when you are going to lose this plan either because of retirement or your employer is discontinuing the plan.  This is called a Special Enrollment Period (SEP).  If you stay on the Employer’s Plan at age 65 because you or your spouse are continuing to work the Employer must have more than 20 or more employees.  If so, then the Employer’s Plan is your primary insurance.  If the Employer has less than 20 employees, then you MUST sign up for Medicare during the IEP.  
The IEP is the 3 months before you turned age 65, the month you turn 65, and the following 3 months.  If you sign up for Medicare in the 3 months preceding your 65th birthday then your Medicare will be affective the first day of the month you turn age 65.  If you sign up the month you turn age 65 Medicare is effective the first day of the following month.  If you sign up for Medicare in the 3 months following your 65th birthday then you are delaying your coverage even further, up to 5 months.  It is very important to apply early for Medicare if you do not have an EGHP to avoid a loss of coverage.
The SEP is the 8-month period starting the month after you stop working or lose your Employer’s Plan.  If you stop working in March, then your SEP begins April and ends November.  The month you enroll determines the month your Medicare Part B begins.  If you enroll any month after March or April your Medicare Part B will begin the following month.  If you know you are losing your EGHP you can also sign up the 2 months prior to March.  This point is very important:  If you have COBRA coverage, VA coverage, or a retiree health plan, you do not have coverage based on current employment. You are not eligible for a Special Enrollment Period.
Please do not make that mistake!  If you miss your Special Enrollment Period then you are restricted to signing up for Medicare during the General Enrollment Period (GEP) which is January, February, and March of each year and coverage is delayed until July of that year.  You will also pay a 10% penalty on your monthly premium for each 12-month period you could have had Medicare but did not enroll.  This penalty is for the rest of your life.  
There are also other factors to take into consideration when applying for Medicare Part B.  If you have an EGHP and you want to sign up for Medicare as a supplement you may.  But keep in mind you may have an increase in your premium based on your income.  This would be on top of the normal monthly Part B premium.  The increase in your monthly Medicare premium, or Income Related Medicare Adjustment Amount (IRMAA), is based on your income two years prior to the premium year.  The IRMAA can be appealed if you have a life changing event that affects your income. A life changing event could be retirement, loss of your spouse through either death or divorce, loss of income producing property, loss of pension income or work reduction.
If all if this has given you a headache then you are not alone. The rules concerning Medicare enrollment periods are very complicated.  If you are unsure of how this all affects you, do not guess or rely on your neighbor to give you guidance. Call your local Social Security office or call Medical Reimbursement & Management Services.
Beth Cooper Ingle is a Senior Care advisor with Medical Reimbursement & Management Services.  Her background is 37 years as a Social Security Rep in Central Illinois and a Certified Senior Advisor®.   For more information, contact MRMS, a firm specializing in issues affecting seniors and all people with health insurance, including seminars and consultation on Medicare Plans, Long Term Care and other types of insurance, claims issues, and sales/service of insurance products since 1984.  Offices are at 809 W. Detweiller Dr., Peoria, IL 61615. Tel: 693-1060. Steven A. Buttice is the president of Medical Reimbursement & Management Services, Inc website

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