I met with a client this past weekend who was receiving Social Security disability payments for 24 months and was automatically enrolled in Medicare on the 25th month. A new Medicare card was sent to him in the mail.
Since he has a group health insurance plan at work, he didn’t give it much thought until he noticed $402 dollars had been deducted from the Social Security checks he received over a three month period.
After a visit to his local Social Security office, he learned the monthly deduction of $134 (accumulating to $402) was payment for his Part B (Doctors) premium for Medicare benefits.
While there, he realized there was no need to have double coverage and signed a form to stop the deductions and returned his Medicare card. Later, he received a refund for the $402 dollars.
If you are faced with this situation, here’s what you need to do. First, contact your human resource person at work to see how your coverage will work with Medicare.
Your group insurance is primary if your employer has 100 or more employees where you or your spouse or other family members work. My client is a teacher and employed by a large school district which allowed him to dis-enroll from Medicare Part B without a penalty.
By the time we met he had already received a new Medicare card with just Part A on it. One must have a least Medicare A (Hospital insurance) in order to receive Social Security benefits.
Since he was leaving his group insurance plan on June 1st, he was now eligible to apply for Part B (doctor insurance) this time using the Special Election period rules.
This Special Election period allows you to enroll in Part B at any time without penalty while you or your spouse (or a family member) is still working, and for up to eight months after you lose your employer coverage or stop working.
Remember, you will not have a Special Election Period if you have COBRA or retiree insurance. If you delay enrollment in Part B under these circumstances you may have to pay a penalty when you sign up.
A few years ago, I met with another client who became eligible for Social Security disability benefits at age 52. Since his employer had less than 100 employees on the group plan at work, he signed up for Medicare Part A and B after his 24 month waiting period. This time Medicare was his primary insurance.
Unfortunately, he went on line and signed up for a private Medicare Advantage plan before he talked to me and didn’t read the fine print which stated his out of pocket risk could total up to $6,700.
Following a major medical episode where he spent way more than $6,700, he wanted to change back to Original Medicare for better coverage.
I informed him he was stuck with the Advantage plan until age 65 when he would have another opportunity to exercise guaranteed issue under another Initial Election Period option beginning 3 months prior to age 65 and 3 months after. Only then could he return to Original Medicare.
This one mistake will cost him thousands of dollars.
The Medicare trail is full of pot holes. Don’t make the same mistake. Always get help. Our Medicare Coach program is designed to show you the way so you will know what to do when you are faced with your Medicare decisions.
-Larry
