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Dear Toni:
I need your help about enrolling in Part B or delaying it. I am self-employed with an individual under-65 health insurance plan that covers me and my wife. I have been told by friends that since I am still working, paying taxes and have health insurance, I do not need Part B when I turn 65.
A business associate who is also self-employed delayed his Part B because he is under his wife’s employers group health insurance. I do not want to make a big mistake. Please explain the difference between my situation and my friend’s.
-Bill from Tulsa, Okla.
Hello Bill:
Great Medicare question. Last week I consulted with a person who is also self-employed but was given wrong information about delaying his Part B. His Medicare nightmare is now starting. Medicare does not recognize individual plans like yours, Bill, as “true company” benefits, with creditable prescription drug coverage, that would allow you to delay Part B.
Now this person, who is 66, will receive not only a 10% penalty each year due to not enrolling in Part B, but a 20% penalty (2 years: ages 65 and 66) each month for as long as he is on Medicare — or I should say, the rest of his life. The 20% penalty goes up as the Part B premium does.
Not working full time with “true employer” benefits is what Medicare looks for in administering the 10% per year, or 12-month period, Part B penalty. Bill, since you currently have an individual health insurance plan — not true group health insurance — I would recommend that you enroll in Part B during your Initial Enrollment Period to avoid the penalty.
Many people believe that Medicare is automatic; this is only true if you are already receiving your Social Security check when you turn 65. If you are not receiving your Social Security check and want your Medicare to begin the first day of the month you turn 65, go online to www.ssa.gov/medicare/sign-up to apply for Medicare Parts A and B anytime during the 3 months before your 65th birthday.
Bill, your business associate who is covered under his working spouse’s “true employer” group health benefits can delay enrolling in Medicare. He must, however, follow Medicare’s enrollment rules as Social Security deems.
“Still working” are magic words when it comes to enrolling past 65 due to losing your (or your spouse’s) company benefits. The Medicare and You Handbook discusses delaying Medicare Part B when you are leaving your or your spouse’s group benefits under the subtitle “I have other health coverage. Should I get Part B?”
If you delayed enrolling, you qualify for a Special Enrollment Period and can sign up for Part B “during the 8-month period that begins the month after the employment ends or the coverage ends, whichever happens first” to avoid the penalty. The handbook does not clarify that those who delay will not have any of the benefits that Medicare Part B covers until they are actually enrolled in Part B.
During a Toni Says Medicare consultation, we recommend that your and/or your spouse’s Medicare Parts A and B begin the first day that the employer group health plan is ending, to be sure there is medical coverage whenever a medical need arises.
TONI KING is an author and columnist on Medicare and health insurance issues. She has spent nearly 30 years as a top sales leader in the field. If you have a Medicare question, email info@tonisays.com or call (832) 519-8664. Toni’s new book, Maze of Medicare, is now available on www.tonisays.com. Maze of Medicare is the first explanatory book that includes scripture and positive quotes to help relieve the stress and anxiety over transitioning to Medicare.
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