Understanding Medicare enrollment periods

A week does not go by where somebody is calling for advice on enrolling in Medicare. With knowledge of the Medicare enrollment periods, much of the mystery can be removed.

Initial Enrollment Period (IEP)

The IEP applies to the individual turning age 65. If individuals are eligible for Medicare when they turn 65, they may enroll in Medicare Part A and/or Part B. This is a seven-month period that begins three months before the month an individual turns 65, the month of their birthday and three months following. Note: If the birthday is the first of the month, then the seven months move back a month. As an example, for an individual with a Nov. 1 birthday, the IEP begins on July 1 and the effective date would be Oct. 1 if they sign up in one of the three months preceding.

If an individual waits until the last four months of their IEP, then their coverage will be delayed as follows:

If enrolling in the month of Initial Enrollment Period

Coverage begins:

The month turning 65

One month after enrollment

One month after turning 65

Two months after enrollment

Two months after turning 65

Three months after enrollment

Three months after turning 65

Three months after enrollment

However, thanks to the Consolidated Appropriations Act of 2021, these delays in effective dates will be a thing of the past in 2023.

People who enroll in Medicare during their birthday month or the three months following their birthday month will see their coverage begin the first day of the month following the enrollment.

Individuals on Social Security Disability for 24 months will be automatically enrolled into Medicare at the 25th month. They will also have an IEP when they turn 65.

It is important to note that if beneficiaries decline to be covered when first eligible and continue on their COBRA or individual plans without enrolling in Medicare, they may end up having to wait for the next General Enrollment Period to apply for Medicare coverage and may be subject to penalties.

Enrollment for most people turning 65 is not automatic. You must enroll yourself. If you are receiving early Social Security benefits, then you receive your Medicare card automatically about three months before your effective date.

Special Enrollment Period (SEP)

Once the IEP ends, the individual may sign up for Part A and Part B but only if they meet certain requirements of the SEP. If an individual is covered under a group insurance plan based on current (active) employment, they have an SEP to sign up for Part A and/or Part B at any time, as long as the individual or the spouse is working and covered by a group health plan through an employer or if in a union plan based on work for coverage.

The effective date for coverage varies as it is based on when the enrollment request is made if enrolling during the SEP. After Social Security receives and processes the request for enrollment, the Medicare coverage typically begins the first month or, at the individual's option, the first day of any of the following three months. Usually, a late-enrollment Part B penalty does not apply. The SEP also does not apply to individuals with end-stage renal disease and coverage under Veterans Affairs or individual health insurance marketplace coverage.

Important Note: Individual and retiree plans are not considered creditable coverage based on current employment. People under these plans are not considered eligible for a Special Enrollment Period and must apply during the General Enrollment Period. COBRA is also not considered creditable coverage and beneficiaries must enroll in Medicare within eight months of their last day of active work. Otherwise, they will need to wait for the next GEP to apply.

When I meet with prospects, I remind them that timing is everything with Medicare. Their delays to enroll in Medicare could result in penalties for Part A and Part B and in a delay in coverage. Individuals who lose their group coverage have up to eight months to sign up for their Part B. The individual must have both Medicare Part A and Part B to sign up for the Medicare Advantage or Medicare Supplement plans. They may have either Part A or Part B to enroll in the Stand-Alone Prescription Drug Plan. They only have 63 days after the loss of their employer coverage to enroll in a Medicare Advantage Plan or Stand-Alone Part D plan. Individuals have six months from the initial date of their Part B to sign up for a Medicare Supplement plan on a guaranteed-issue basis.

General Enrollment Period (GEP)

The GEP runs from Jan. 1 to March 31 each year and is a time when people who missed their initial enrollment period for Medicare can sign up for Parts A and/or B.

In the past, however, GEP applicants would face a delay in their effective date until July 1. However, beginning in 2023, that gap in coverage will be eliminated. Benefits for GEP applicants will begin on the first of the month following the date on which they applied.

In most cases, individuals, if signing up for Part B of Medicare, will be subject to the Part B late-enrollment penalty of 10% for each 12-month period they were not covered under Part B. The penalty continues as long as they have Part B. Don't neglect to review the possible Part D penalty as well for the delay in coverage under Part D (Medicare Advantage prescription drug plan or a stand-alone prescription drug plan). Note that veteran drug coverage is considered creditable coverage for Part D.

Refer to medicare.gov for information regarding the Part A late-enrollment penalties.

Many insurance agents and HR managers do not understand the Medicare enrollment periods and eligibility. You could be subject to delays in coverage, penalties and added medical and prescription drug costs just because of the un-informed decisions you make when delaying Medicare Part A and B coverages, especially if the health coverage is not creditable for later enrollment.

Harry P. Thal, the Medicare Guru in Kernville, is available for free phone consultations. Call for a phone appointment: 760-376-2100.