When to sign up for Part B
If you don’t sign up for Part B when you should, you will be hit with a harsh penalty: a permanent increase in your premium of 10 percent for every year that you should have been enrolled but weren’t. In 2013 the standard Part B premium is $104.90 a month.
Most people should sign up for Part B either when they turn 65 or when they or their spouse stop working, whichever comes later. Sounds simple, but be aware of these exceptions and gotchas if any of these situations apply to you or your spouse:
- You are still working at a large employer. You can delay enrollment without penalty if you have health insurance through your own or a spouse’s current job at a workplace with 20 employees or more. Once the last working spouse leaves his or her job, even if they’re getting COBRA or retiree insurance, it’s time to sign up for Part B. You have eight months, starting the month after the job ends, to get this done without penalty.
- You are still working at a small employer. If your workplace has fewer than 20 employees, sign up for Part B as soon as you turn 65. Your employee health plan then becomes a secondary plan that kicks in after Medicare has paid its share of the bills. Workplaces this size are allowed to drop you from their employee plan after you reach 65, something that’s against the law for larger employers). If you ignore this rule, and your group health plan finds out you’re over 65, it may refuse to pay claims that Medicare would have paid.
- You or your spouse is on COBRA. Even though the COBRA plan is exactly the same as your former group health plan, once you turn 65 you must switch to Medicare. But COBRA can still function as the main insurance for the younger spouse, and you can keep parts of your COBRA plan that Medicare doesn’t cover, such as your dental benefit. Learn more about Medicare and COBRA.
- You have a retiree plan. If you have a retiree plan from your old job, you must sign up for Part B when you turn 65, even if your retiree plan doesn’t change at all. After you go on Medicare, the retiree plan becomes a secondary plan (but may still function as the main insurance for your younger spouse). Your plan might not, however, pick up all the costs that Medicare doesn’t, so check with your plan administrator. If coverage is meager and premiums high, compare this to what it would cost to drop your retiree plan and get aMedigap or Medicare Advantage plan instead. Also find out if you can rejoin your retiree plan later if circumstances change; sometimes you can and sometimes you can’t.
- You receive veteran’s benefits. The Department of Veterans Affairs and Medicare operate independently of each other for the most part. Medicare won’t pay for care you get at a VA facility, and the VA won’t help you with your Medicare co-payments and deductibles (except if the VA authorizes you to get care at a non-VA hospital). The VA encourages veterans to sign up for Medicare A and B to have the flexibility to seek care at non-VA facilities if need be. Moreover, if you are not in one of the VA’s higher priority groups, you could lose your coverage suddenly if Congress decided to cut back the VA’s budget. At that point, you would have to pay a penalty for late enrollment in Medicare Part B. Learn more about VA and Medicare.
- You have TRICARE for Life. If your military service entitles you to TRICARE for Life, you must sign up for Part B when you turn 65, regardless of whether you are working or have other sources of coverage. If you don’t, you lose your eligibility for this valuable benefit. Learn more about how TRICARE works with Medicare.
- You are on the Federal Employees Health Benefits Plan (FEHB). FEHB will continue to cover you after retirement, even if you don’t take Medicare at all. But if you delay enrollment in Part B after retiring, and then change your mind later, you’ll be hit with the Part B late-enrollment penalty. Because FEHB premiums can be substantial, you need to consider your options carefully. Learn more about how FEHB works with Medicare.