The 2017 Medicare & You publication states that individuals turning 65 who want to enroll in Medicare must file an application for Part A and Part B with Social Security (SS). I was pleased to see this in black and white since other SS and Medicare publications on enrollment have stated everyone had to enroll in Part A and Part B at 65.
A person who is currently receiving SS or Railroad Retirement benefits does not have to file since they will be automatically enrolled in Part A and Part B when 65.
Some points for individuals at 65 who want to enroll in Part A and Part B:
- It is always best to call the local SS office for an appointment to enroll vs. calling the 800 number.
- When calling the local SS office, they may suggest handling the enrollment while on the phone. However, it is a good idea to firmly ask for an “in person” meeting to review and select one of the options SS offers to pay Part B’s monthly cost. It is also a good time to have a discussion about when to receive SS benefits.
- When a person files an application in the first part of their initial enrollment period (IEP) (three months before and three months after the month they turn 65), coverage will begin the first day of the month when turning 65. If a birth date is the first of a month, coverage will be effective the first of the previous month.
- When an enrollment application is made in the second part of their IEP (the month when turning 65 or in any of the three months after) the Part A and Part B start date is delayed.
- Individuals can enroll in Part A at any time after first eligible, but if they apply more than six months after becoming 65, Part A coverage will be retroactive for six months.
If a person did not, for some reason, enroll during their IEP and was not covered by a group plan, they have to wait for the general enrollment period. It is in-between January 1 and March 31 for coverage beginning July 1.
Note: A 10% penalty will be added to a person’s Part B monthly cost for each full 12 months of not having enrolled when eligible.
When a person over 65:
- Is working and wants to continue to contribute to their HSA, they need to visit their SS office to be sure their record shows group coverage and Part A shows not enrolled.
- Is covered by a group-based HSA and decides to leave work their contributions need to stop six months before applying to avoid tax problems.
- Is working in an organization with 20 or more employees, their insurance company, as noted in the July 2016 version of Medicare’s Who Pays First publication, will ask if they are working and report this coverage to Medicare.
- The Who Pays First publication also states that when a group medical plan with 20 or more employees does not pay all of a person’s treatment expenses the person’s medical doctor or treatment provider “should” bill Medicare as secondary coverage. Medicare’s payment however, is not based on the group plans uncovered costs, but will be 80% of Medicare’s approved amount for the treatment.
A couple of points when a person over 65, and covered under a group health plan, decides to enroll in Part A and Part B:
- They can enroll at any time, but no later than eight months after either their employment or the group coverage ends, whichever comes first.
- They will have to pay a higher monthly cost for Part B and Part D if their modified adjusted gross income (MAGI), as reported on their IRS 1040, was higher than 85,000 for single or 170,000 for a couple. If they enrolled in 2016, their MAGI from 2014 would be used. There are also three additional higher payment amounts when a person’s income is even higher.