You have other health insurance so it’s logical you don’t need to sign up for Medicare – right?
This can be a big mistake – Medicare only allows you to defer enrollment if your medical and drug insurance is considered ‘creditable’.
Not all health insurance is creditable which means you can be in be for a nasty shock when you finally sign up for Medicare.
| You should enroll in Medicare during your Initial Enrollment Period (IEP) to avoid penalties if any of these situations apply: – You are currently using COBRA or retiree insurance from a previous job – You are enrolled in an individual health insurance plan such as an ACA or ‘Marketplace’ plan – You rely on short-term insurance or have no insurance at all – You have VA health coverage – You have TRICARE coverage and are retired |
What about if I am still employed?
If you are still working, you need to determine if your (or your spouse’s) employer coverage is ‘creditable’:
| Determining if your health plan is ‘Creditable’ | |
|---|---|
| Medical Insurance | If your employer provides medical health insurance and your employer has more than 20 employees, then the coverage is considered ‘creditable’. You can choose to defer enrollment in Medicare Part B and avoid paying the Part B premium as well as any late enrollment penalties. |
| Prescription Drug Insurance | If your employer provides drug and coverage and the coverage is ‘as good as’ Medicare’s, then it is considered ‘creditable’. This means your plan is expected to help pay, on average, as much as Medicare’s standard prescription drug coverage. Your employer’s health plan should provide you notice informing you if your drug coverage is creditable each year in SeptemberTo avoid penalties, enroll in a Part D plan within 63 days after losing employer coverage |
Having other insurance does not mean you can skip the Medicare enrollment process
Before deciding to defer enrollment in Medicare, make sure your current coverage is considered ‘creditable.’
Overlooking this step can be a costly mistake down the road. Penalties will reach up to 10% extra for each year and can last for as long as you have Medicare (i.e., a lifetime).
| Tip: Sign-up for Medicare Part A – Hospital Insurance if you’ve paid your Medicare taxes. If you (or your spouse) have paid Medicare taxes for at least 10 years, you’re eligible for premium-free Part A and will have no late enrollment penalties regardless of when you enroll.In most cases, it still makes sense to enroll in Part A as Medicare can work alongside your company’s group insurance to lower costs for any hospital stays. Note: You should not enroll in Part A if you want to continue contributing to a Health Savings Account (HSA), as contributions aren’t allowed after you’ve enrolled in Medicare |
Related Posts
Medicare Advantage Mistakes: Cancelling Part B or Enrolling in a Separate Drug Plan
The Biggest Medicare Mistake: Missing Your Medicare Supplement Open Enrollment Period
Don’t be a statistic. Do you understand your Medicare coverage?
