As an advisor specializing in options for individuals eligible for Medicare, one of the most common misunderstandings is “when” to enroll to avoid potential penalties.
If you’re nearing age 65, you’re likely familiar with the junk mail phenomenon — a sea of confusing advertisements disguised as legitimate “government-sponsored” enrollment forms. You may receive phone calls, or an even bigger “no-no” by Medicare compliance, a door to door salesperson. Before addressing “when,” it is helpful to know “who” is eligible for Medicare.
Medicare is government-sponsored insurance known as Part A (hospital service) and Part B (outpatient medical services) provided typically at age 65; however, someone covered by disability benefits for a period of 24 months may be eligible at any age. For this latter group, there are two Initial Enrollment Periods — one beginning after the 24th month receiving disability benefits and a second when the person turns 65.
WHEN IS THE INITIAL ENROLLMENT PERIOD (IEP)?
The IEP is the first time you can sign up for Medicare Parts A, B, C (Medicare Advantage) and D (prescription drug plan).
- 3 months before your 65th birthday
- The month of your birthday, and
- 3 months after your birthday
Most people sign up for Medicare as early as possible (3 months before their 65th), and coverage begins the first day of their birth month.
example, Debbie turns 65 on September 24th.
Her IEP begins June 1and ends December 31.
If she signs up before her birthday, her coverage begins September 1.
If you do not sign up for Medicare during this window you may be subject to penalties.
WHAT IF YOU’RE STILL WORKING OR COVERED?
If you are over 65, you may have delayed taking Part A or B if you have credible coverage. In this case you may qualify for a Special Enrollment Period (SEP):
- While covered by yours or your spouse’s current or active employment health plan OR
- When employment ends or during the 8 months following the month the employer coverage ends.
There are other ways to qualify for a SEP, but loss of an employment health plan due to a job change or retirement are the most common. If you do not sign up for Medicare during this window, you may be subject to penalties.
If you miss one of these two enrollment windows you will get another chance to enroll during the General Enrollment Period:
- From January 1 to March 31 each year
- Medicare coverage begins on July 1 of the same year
CHANGING YOUR MEDICARE PLAN ONCE YOU’RE ENROLLED
There are two opportunities each year to either enroll or change your Medicare plan. To do this you must already have Medicare Parts A and B in place.
- Open Enrollment Period, also known as Annual
Election Period (AEP), runs each year from October 15 to December 7. New
coverage takes effect the following January 1. Options during this period
- Anyone with A and B can switch to a Part C (Medicare Advantage) plan.
- Anyone with Part C can switch back to Part A and B.
- Anyone who has or is signing up for Part A and B can join, drop or switch a Part D (prescription drug) plan.
- Anyone with Part C can switch to a different Part C plan.
- Medicare Advantage Open Enrollment Period
runs each year from January 1 to March 31 or the first 3 months of enrollment
in Part A and B and:
- Anyone enrolled in Part C can change to a different Part C plan.
- Anyone enrolled in Part C can drop their coverage and return to Medicare A and B and enroll in a Part D (prescription drug) plan.
There is no cost to talk to a qualified Insurance Health Advisor to discuss your options. Let us guide you through the process and help you understand what’s right for you. Call today 417-725-1131 or request a call back.