You waited to enroll into a Medicare Prescription Drug Plan and/or a Medicare Advantage plan because you were still working and had a health plan through your employer. Upon retiring, you receive a notice from CMS (Centers for Medicare and Medicaid) letting you know that you didn’t have credible coverage when you were first eligible for Medicare and will now be responsible for a penalty.
Unfortunately, this happens far too often and it is beyond frustrating and downright maddening. Late Enrollment Penalties (LEP) are an unwelcomed surprise. The issue is that the penalty is not a one time penalty. The penalty will go on for the rest of the time that you either have a Medicare Prescription Drug Plan and/or a Medicare Advantage plan.
Late Enrollment Penalties are defined like this:
Medicare beneficiaries may incur a late enrollment penalty (LEP) that is added to their Part D premium if there is a continuous period of 63 days or more, at any time after the end of the individual’s Part D initial enrollment period, during which the individual was eligible to enroll, but was not enrolled in a Medicare Part D plan and was not covered under any creditable prescription drug coverage.
We believe strongly in providing information and education on each insurance product that we offer. When meeting with a client that will be eligible for Medicare, but doesn’t take medication, they often ask me, “Why do I need this plan if I don’t take any medications?”
It’s a fair question.
Although prescription drug plans/coverage are not required for you to have, if you do enroll into a plan at a later date and didn’t have credible coverage (The coverage has to be equal and/or better than what Medicare requires), you can possibly be penalized. As mentioned before, that penalty remains with you as long as you have the coverage.
Rather than having a penalty that costs you more, it is beneficial to enroll into a prescription drug plan when you are first eligible. If you have coverage through your employer, ask your employer for a document that states that your prescription drug coverage is credible. If the coverage is credible, you can wait until you retire you enroll into a prescription drug plan.
It is important to note, though, that you should ask for this document of credible coverage every year. It might be credible one year and not the next.
At Balanced Care, we don’t like surprises and don’t want you to have an unwelcomed surprise of a penalty.
When you are coming up upon eligibility for Medicare (3 – 6 months prior to turning 65), reach out. We are happy to make sure your protected with your health and your pocketbook.
Terri Trepanier is the owner of Balanced Care. Licensed in both Maine and NH, her specialty is working with small businesses, individuals, and families with their health and life insurance needs. She is certified to offer health plans both on and off the exchange and is contracted with every health insurance company in both New Hampshire and Maine. Her other passion is assisting Medicare beneficiaries with their Medicare Supplemental, Medicare Part D Prescription Drug Plans, and Medicare Advantage plans. Terri has seen firsthand the importance of insurance and works to “Insure Security and Peace of Mind one Family at a Time”.