By Andrew L Hibbard 

@WNYMrMedicare

Originally Posted: 03 JULY 2023

Updated & Revised:

Medicare late enrollment penalties, or LEPs, are a common and costly pitfall many Baby Boomers seem to be dealing with these days.

As more and more Baby Boomers “age into” Medicare, (over 10,000 a day), they might be thinking not to retire at 65, rather continue to work until they reach their arbitrary and re-assigned “full-retirement” age, and assume they need to do nothing with Medicare.

This is an often-overlooked decision. And a decision that deserves special attention. Maybe more attention than some think to give it.

The Medicare rules and regulations are written in a way which prioritize and prefer you to sign up and start your Medicare benefits right when you turn 65. They call this your Initial Enrollment Period, or IEP. (Think of it as the first time you are eligible to enroll in Medicare).

There is a unique and uncommon option, when you can suspend your Medicare benefits until after 65, if have alternative health insurance coverage that’s considered “credible.”

How do you know if your alternative health insurance coverage is considered credible?

Here’s what Medicare states on their government website at cms.gov:

“Beginning January 2006, the Medicare Modernization Act (MMA) was passed…stating under §423.56(a) of the final regulation, coverage is creditable if the actuarial value of the coverage equals or exceeds the actuarial value of standard prescription drug coverage under Medicare Part D, as demonstrated through the use of generally accepted actuarial principles and in accordance with CMS actuarial guidelines. In general, the actuarial equivalence test measures whether the expected amount of paid claims under the entity's prescription drug coverage is at least as much as the expected amount of paid claims under the standard Part D benefit.”

What? Let me explain…

Basically, in plain, easy-to-understand English, if you (or your spouse) are still working through active employment, and you (or you spouse) is enrolled in a health insurance from that Employer which meets or exceeds what Medicare provides, you DO NOT need to enroll in Medicare at 65 and can suspend your benefits and sign up later in life.

So, if you will work past 65, and you can keep your health insurance from your job you can wait to sign up and start Medicare until after 65. Cool.

But, even though Medicare will let you wait, the next question you may think to ask is…

How Will Delaying Medicare At 65 Affect My Premium Later?

I’m glad you asked.

Remember those common and costly late enrollment penalties (LEPs) I mentioned earlier? 

There are actually two (2) LEPs you will get whacked with which pertain to both, the price you will pay for Medicare Part B, and also, the price you will pay for Medicare Part D.

And, by the way, your Medicare Part B and Medicare Part B LEPs are lifetime penalties. They aren’t a lump-sum payment you pay and play “catch up” and all is forgiven.

No, these annoying (but avoidable) Medicare LEPs are something you have to pay each and every month, over and over, forever and ever, until the day you die.

Now, how they calculate what your penalty is exactly changes from year to year, so I can’t give you the facts and figures today, but what I can do is help you protect your financial future better in this way…

Here are a few qualifying questions to ask yourself that will provide some insight, and may prevent a future penalty, giving you the smart steps you should take when wondering if you have to sign up for Medicare if you have other insurance…

(Question #1) Do you, or your spouse, work for an employer with 20 or more active employees, who is proving you (or your spouse) health insurance benefits from that job?

Answer: Contrary to popular belief, you may be able to suspend both your Medicare Part A and Part B benefits until after age 65 when you stop working and sign up at a future date without paying a late enrollment penalty. You will need to confirm your current health insurance from your employer meets the “credible coverage” requirements.

You can proactively pre-file a “preliminary proof of credible coverage” form through the WNY Medicare SmartStart Program. This gives you a second set of eyes on your situation, alleviates any assumptions you may make, and all but guarantees you will not pay a costly penalty later in life. Click HERE to schedule a complimentary, no-cost Medicare SmartStart Strategy Session to share your situation and submit your “preliminary proof of credible coverage” form.

(Question #2) Do you, or your spouse, work for an employer with 19 or less active employees, who is providing you (or your spouse) health insurance benefits from that job?

Answer: Unlike working for an Employer with 20 or more active employees, if you, or your spouse, work somewhere with 19 or less active employees, you likely need to sign up and start both Medicare Part A and Part B even if you choose to keep working, otherwise your employer based group health plan (EGHP) may not cover the costs for services you get when eligible for Medicare but not enrolled.

In this instance, if you sign up for Medicare Part A and Part B, your Medicare coverage would be considered your primary payer while your health insurance from your job would pay secondary.

If you would like to clarify the coordinate of coverage and have a casual conversation to shed some light on your situation, please feel free to schedule a complimentary, no-cost Medicare SmartStart Strategy Session HERE and we can get together and walk-through what you should expect and get you answers to any question you may have.

(Question #3) You, or your spouse, will keep working past age 65, and are self-employed, or have health insurance that is not available to everyone equally at your employer.

You will need to ask if your health insurance is considered an employer group health plan (EGHP) as deemed acceptable by the IRS. (Whatever your answer, I strongly suggest you request written verification).

If it is not an EGHP, you will have to sign up and start both Medicare Part A and Part B at 65 regardless of your alternative healthcare options, otherwise you will be assessed a late enrollment penalty that you’ll pay for your lifetime.

And honestly, in my opinion, if you are in the situation and you even have to ask, or question what you should or shouldn’t be doing, it’s likely safer…and smarter…to just sign up and start Medicare at 65 to avoid all the hassles and hurdles later in life. 

Ok, there’s a lot to deal with, right? I get it.

And as an active adult in WNY, who’s always on the run, you need a smart solution to cut through all the clutter. 

If you want some light shed on your situation, your hand held the whole way, and making your move to Medicare simpler, easier, seemingly stress-free and almost effortless, I can do just that. Here's how...

NEARING AGE 65 AND AREN'T SURE WHERE TO START?

**If you are TURNING 65 IN 6-12 MONTHS, my #1 Amazon best-selling guidebook, "Starting Medicare Smartly" will give you a great overview of everything you need to know, before you need to know it. Instead of buying on Amazon for $12.99, click HERE now and let me send you a completely free, complimentary copy, all at my expense.

**If you are TURNING 65 IN 4-6 MONTHS, you should be getting ready to enroll and your paperwork prepared to either sign up at 65, or suspend --- you can't do nothing. If you don't have the time or desire to deal with doing any of the dirty work with Medicare yourself, OR, you feel frustrated, confused and kind of clueless about figuring out the fine print with Medicare, you can rely on my free Medicare SmartStart Program and let me take away all your stress of trying to tackle anything on your own. It's how I help people just like you. Weekly availability is limited to the first 10 folks, and maximum 40 per month. Don't delay. Click HERE nowto learn more about my nationally recognized program, and how you can put it to work for you --- for free.

**If you are TURNING 65 IN 1-4 MONTHS, you are cutting it close to your Medicare late penalty period. If you have NOT yet filled out and filed your Medicare forms, you are behind and against the clock. It is URGENT we get together as soon as possible so I can do all I can to help you avoid paying a costly late penalty for life --- before it's too late! Click HERE now to immediately schedule an emergency Medicare SmartStart Strategy Session with me...if there are still any available.

HAVE MORE MEDICARE QUESTIONS?

Read the most common questions folks in WNY ask when they aren’t sure how to get started with Medicare. Click HERE to see the complete Medicare SmartStart Answers article archive.

ABOUT THE AUTHOR

Andrew L Hibbard is a prominent name when mentioning Medicare in WNY, but one you may have never heard of. Working behind-the-scenes, he is a best-selling author, expert advisor and successful agency owner. Focused on educating first, Andrew prides himself on being considered “the only advocate in WNY fighting for better and more reliable Medicare resources, free from insurance company conflict of interests.”

To take away the stress of trying to tackle Medicare alone and feeling forced to figure it all out by yourself --- Andrew created the WNY Medicare SmartStart Program; a free, step-by-step plan, that holds you by the hand to sign up and start Medicare smartly. (More than 850+ people have gone through the program and call it “the lazy way to get Medicare done for you without costing you a dime”).

**SPECIAL FREE GIFT** If you want to see how hundreds of WNY'ers each year are doing things different with Medicare, and getting it all done in record time, you can request a special "Medicare SmartStarter Info Kit” at no-cost to you, Andrew will give it to you as his free gift. It will prove, without a doubt, why his Medicare SmartStart Program is widely considered the most popular and preferred way to sign up and get started with Medicare in WNY, Guaranteed! Simply click HERE right now and everything will be rushed to you right away. It's that easy!