Janell Sluga Medicare & Individual Health Insurance Account Executive View Bio

 Question:

I got a letter from Medicare (Centers for Medicare & Medicaid Services, CMS) saying that I might need to sign up for Medicare Part B. I have coverage through my employer, so do I still need to have Medicare Part B?

Answer:

According to data.cms.gov, over 68 million Americans are enrolled in Medicare. Each of those 68 million have slightly different circumstances that impact their Medicare enrollment decisions. Over half of those enrollees have Medicare Part A & B plus additional insurance, like Medicare Advantage Plans, Medicare Supplement Plans, or Medicare Part D drug plans. On the other hand, slightly less than half of those 68 million American’s have coverage through another source, like employee benefits.

The annual General Enrollment Period (GEP) runs from January 1 to March 31 and allows individuals an opportunity to sign up for Medicare Part B if they did not enroll when they should have. During the GEP, CMS sends letters like the one you received reminding people with only Part A that they MIGHT need to add Part B. This is mailed to them automatically, but not everyone who has Part A will need to add Part B.

To decide if you need Part B, there are a few questions to ask.

  1. Did you qualify for Medicare based on age or disability?
  2. If you qualified based on age, then the next question is: are you or your spouse currently an active, working employee at the workplace you receive your health benefits through?
  3. If yes, then the last question is: are there at least 20 full-time employees at your employer’s workplace? If yes, then you should not be penalized for declining Part B. If there are fewer than 20 employees, or you not actively working for that employer, then you may be penalized if you do not add Part B.

Note that the only difference for when you qualify based on disability but have coverage through your spouse’s employer is that this employee number jumps to 100 minimum full-time employees instead of just 20.

Since you already had coverage through your employer, it sounds like you signed up for Part A only, you were actively working for your employer, and they had the correct minimum number of employees so you could avoid signing up for Part B without penalties. This was likely the ideal decision for you because Part A acts as secondary coverage to your employee benefits anytime you need hospitalization coverage.

However, as your letter from CMS suggests, maybe you do need to add Part B this year to avoid penalties. This could be due to retirement, or your group size has shrunk. If these or other situations apply, you need to understand what happens. If you should have applied for Part B earlier and didn’t there is a penalty for that period of time you are consider under-insured.

The penalty applies once you decide to add Part B, and it would be a 10% increase to your Part B Premium for each 12 consecutive months you were incorrectly without Part B. That means that if you missed your chance to sign up for Part B any time less than 12 full months ago, you would still NOT face any penalty. However, if you missed your chance between 12 and 24 months ago, then you’d be penalized at 10%­ – and if you missed your chance to sign up 24 months ago, you would be penalized with at 20%. Again, it’s a 10% for EACH consecutive 12-month period you missed. And that DOES increase per 12-month period, so if you missed your chance by 36 months, then it would be 30%, and so on.

That 10% is a percentage of the current Part B premium, which is $185. You’d pay an extra $18.50 per month, on top of the regular Part B premium of $185. So if you’re a year late signing up, then you pay $203.50 for your Part B instead of just $185. Remember this penalty is paid EVERY MONTH FOR THE REST OF YOUR LIFE. Plus if you’re 24 months, that 20% penalty becomes an extra $37 that you will have to pay monthly, $222 total, every month for the rest of your life. So even if the penalty does not sound too high to you, it quickly adds up, and you should consider your decision to sign up for Part B or not, very seriously.

Okay, let’s stay positive: Let’s assume you made the correct decision avoiding Part B. You had employee benefits through an employer of the right size, so no penalties, but now you’re ready to retire! Do you have to wait until the GEP in January-March? Luckily no, you’ll have a Special Enrollment Period (SEP) to leave your employer plan, add Part B without penalty, and add any needed additional Medicare coverage anytime! When you’re preparing to retire, it’s as simple as signing up for Part B, and then adding any other coverage that you wish. You can complete CMS form 40B to request the activation of Part B, and it will begin on the 1st of the month after the completed form is received by Social Security Administration (SSA).

I hope this information clears up why you got that letter from CMS and also answers your question about needing Medicare Part B. Remember, you only have until March 31 if you NEED Medicare Part B and didn’t sign up earlier.

If you have questions or need assistance navigating your options, don’t hesitate to reach out to the Lawley Medicare Solutions Team. You can contact Medicare Service Team Lead Gabrielle Connor at 716.849.8223, or submit an inquiry through our contact form below. We’re here to help you find the right coverage for your needs!

At Lawley Medicare Solutions, our Medicare and Individual Health Consultants are dedicated to helping you make the most informed decisions about your healthcare needs. We offer personalized service and expert advice tailored to your unique situation. Contact us today by phone or email to schedule a consultation and ensure you’re getting the best coverage for your needs.

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Our licensed Medicare & Individual Health Insurance team can help clients understand the details of Medicare insurance plans, assist with choosing the right benefits and coverage, and provide guidance when life events that affect health coverage occur. For questions, concerns, or to reach Lawley Medicare Solutions, call 716.849.8223.