Timing is everything–in Medicare enrollment
Many pre-retirees tell me they look forward to the lack of deadlines in retirement. If you are turning 65, Medicare enrollment is one deadline you don’t want to miss. If you miss your initial enrollment period (IEP), you could end up with a gap in health insurance coverage and /or pay more than you need to due to penalties. So watch the calendar!
Medicare Initial Enrollment Period (IEP)
When you are approaching your 65th birthday, make sure you know what your deadlines are. For Parts A, B, C and D, your personal initial enrollment period is the 3 months before your birth month, the month of your birthday, and the 3 months after your birth month. For example, if your birthday is July 15, you can sign up from April 1 to October 31. BUT if you want your coverage to start on the first day of your birth month, the earliest date possible and when most employer and individual insurance becomes secondary, (July 1 for this example), enroll by the end of the month before your birth month (June 30 for this example). If you don’t sign up until sometime in July (birth month), your coverage will not start until August. Signing up during the three months after your birth month leads to even more months between enrollment and effective dates, but no penalties.
Medicare and Employer coverage
If you are still working (and your employer has 20 or more employees), you can defer Part B until you stop working. (Details at defer Medicare Part B) If you are on early-retiree coverage or your employer has fewer than 20 employees, you need to enroll in Medicare Parts A and B. Since Medicare will become the primary insurance for you in this case, your employer coverage may not pay at all or minimally if you do not have Parts A and B.
If you have employer drug coverage, check that it is creditable in order to avoid a penalty later.
Finally, if you decide to drop your employer retiree coverage and supplement your original Medicare Parts A and B with an individual open market plan (true supplement plus Part D plan or Advantage/Part C insurance plan), make sure you notify your employer or plan administrator in time. Otherwise, you could be paying for 2 supplemental plans until the employer removes you from your employer plan.
Timing for Supplements (Supplemental Medicare plans/Medigaps)
If you supplement your Original Medicare (Parts A and B) with a true supplemental insurance plan (Medigap), you will want to make sure you enroll in that plan by 6 months after your Part B is effective. Otherwise, you will not be guaranteed acceptance, but instead will need to pass the insurance plan’s health screening.
Even in retirement, you need to pay attention to this deadline. If you do not have employer coverage, just sign up for everything by the month before you turn 65, and all your coverage should start the first day of your birth month with no penalties. Remember you have to have Parts A and B effective before you can sign up for Parts C or D or other supplemental coverage.
Really confused? Contact your State Health Insurance Assistance Program counselors. Find the contact info at: Locate SHIP counselors.