Top 5 things you need to know about Medicare Enrollment
1. People are eligible for Medicare for different reasons.
Some are eligible when they turn 65. People under 65 are eligible if they have received Social Security Disability Insurance (SSDI) or certain Railroad Retirement Board (RRB) disability benefits for at least 24 months. If they have amyotrophic lateral sclerosis (ALS), there’s no waiting period for Medicare. Some people with End Stage Renal Disease (ESRD) may be eligible for Medicare. It’s important to know the different ways that people qualify for Medicare so you can help current and former employees and their dependents anticipate their eligibility for Medicare so they can make timely and appropriate decisions about their enrollment.
People living in the United States and U.S. Territories (except Puerto Rico) who are already collecting Social Security—either disability or retirement—are automatically enrolled into Part A and Part B when they’re first eligible. These people will get a packet of information a few months before they turn 65 or receive their 25th month of Social Security Disability or Railroad Retirement Board (RRB) benefits. At that time, they can choose to keep or decline Part B, but can’t decline Part A unless they withdraw their original application for Social Security and pay back all Social Security cash benefits.
People who aren’t yet collecting Social Security, or aren’t eligible for Social Security Retirement, aren’t automatically enrolled into Medicare. They must sign up by contacting Social Security.
People living in Puerto Rico or foreign countries who already have Part A need to sign up for Part B by completing an Application for Enrollment in Part B (CMS-40B). This form is also available in Spanish (PDF).
If someone is eligible for free Part A due to age, he or she can enroll in Part A any time after they’re first eligible for Medicare during the Initial Enrollment Period (IEP). An individual may be eligible for premium free Part A if they or their spouse paid Medicare taxes while working. If eligible for free Part A, coverage for Part A begins 6 months back from the date they apply, but no earlier than the first month of being eligible for Medicare.
However, the law only allows for enrollment in Medicare Part B (Medical Insurance), and premium-Part A (Hospital Insurance), at limited times:
- Initial Enrollment Period – a 7-month period when someone is first eligible for Medicare. For those eligible due to age, this period begins 3 months before they turn 65, includes the month they turn 65, and ends 3 months after they turn 65. For those eligible due to disability, this period begins three months before their 25th month of disability payments, includes the 25th month, and ends 3 months after. By law, coverage start dates vary depending on which month the person enrolls and can be delayed up to 3 months.
- General Enrollment Period – January 1 through March 31 each year with coverage starting July 1
- Special Enrollment Period (SEP) – an opportunity to enroll in Medicare outside the Initial Enrollment Period or General Enrollment Period for people who didn’t enroll in Medicare when first eligible because they or their spouse are still working and have employer-sponsored Group Health Plan coverage based on that employment. Coverage usually starts the month after the person enrolls, but can be delayed up to 3 months in limited circumstances.
People who are eligible for Medicare based on disability may be eligible for a Special Enrollment Period based on their or their spouse’s current employment. They may be eligible based on a spouse or family member’s current employment if the employer has 100 or more employees.
4. Determining whether a person qualifies for a Special Enrollment Period is the first important factor to consider when making a decision about Part B enrollment.
It’s critical that employees and their dependents consider whether Part B is right for them when they’re first eligible for Medicare. Decisions about Part B enrollment for people with employer–based insurance first depend on whether a person has insurance based on current employment.
Generally, if an individual (or their spouse) is still working and has employer-sponsored Group Health Plan coverage based on that employment, they can delay enrollment in Part B and can enroll later during a SEP. But, there are special rules that they need to know. For example, employer coverage for retirees or through COBRA doesn’t count as current employment, so these individuals don’t qualify for a SEP to enroll in Medicare later. A different set of rules apply if the person has Medicare based on disability or ESRD.
5. Knowing who pays first is the second important factor to consider when making a decision about Part B enrollment.
When Medicare and another health insurance plan are responsible for paying the same medical claim, coordination of benefits rules determine how Medicare works with other health coverage. When someone is considering delaying or declining Part B, it’s important for the beneficiary to know:
- Whether their employer-sponsored Group Health Plan coverage will pay primary or secondary and,
- If it pays secondary to Medicare, whether and how it will pay if they don’t enroll in Part A and/or Part B.
Note that most retiree and small employer plans (employers with fewer than 20 employees) require enrollment in Part A and Part B. If the retiree plan you offer requires Medicare enrollment, please advise your employees planning to retire well in advance. If someone doesn’t sign up for Part B when first eligible, they may have to pay late enrollment penalties, in addition to the standard Part B premium amount, for as long as the person has Part B and they may face periods with little or no health coverage.