By Steven Buttice, Founder and President, Living By Your Design, Inc.
Are you delaying retirement? Are you working deeper into your late 60s early70s? People aged 65+ who work for companies with more than 20 employees may have the option to waive Medicare Part B (medical) coverage if they have creditable group coverage. Since Medicare most likely pays secondary to the group insurance in this situation, a person may save money and not sacrifice much coverage if they waive Medicare Part B. If you are considering waiving Part B, be sure to check with the company’s HR department.
The process of waiving and later enrolling in Part B coverage can be confusing. In addition, the “system” is becoming more automated and more difficult to navigate. Unfortunately, people are responsible for their actions whether they know the rules or not. Ignorance is not an excuse. Social Security will explain the rules if you know the questions to ask. Social Security does not give advice, but will help you with what you wish to accomplish.
Why is this important? Because more issues and significant problems with Social Security and Medicare have arisen. Four recent significant issues have been identified. These situations have the potential to cause financial disaster and the possibility of patients not being able to secure healthcare.
Here’s an example. A self-employed husband and wife in their early 70s with no other employees had an older health insurance policy that would pay full benefits under the policy even though they did not have Medicare Part B. This worked fine until 12/31/2015, when the insurance company cancelled this plan. Since the plan they had was changed from group to individual coverage years ago, Medicare no longer considered it creditable coverage. Therefore, this couple did not have a special enrollment period under Medicare. They needed to apply between 1/1/16 – 3/31/16 for a 7/1/2016 effective date. This situation could have left this couple without any medical coverage from 1/1/2016 until they could start their Medicare Part B coverage on 7/1/2016.
Another gentleman worked for a larger company in Illinois with over 20 employees and retired on 12/31/15. He is age 66 and his wife turned 65 in October 2015. When he turned 65, he waived his Medicare Part B coverage. When he decided to retire, he and his wife enrolled in Medicare Part B, based on loss of creditable coverage due to his retirement. A problem developed with the timing of his wife’s Part B application. The Medicare Initial Enrollment Period is the month of the 65th birthday, the three months prior and the three months after. Since she was within her Medicare IEP, she could enroll in Medicare Part B, but the loss of coverage (Special Enrollment Period) on 12/31/15 did not apply and she ended up without Medicare coverage during January 2016. Her Medicare coverage started 2/1/2016.
It probably sounds confusing because it is very complicated. It is prudent to plan health insurance and when you should start Medicare Part B if you continue working for a company with over 20 employees, but know that it is your responsibility to know the rules. There are not many sources for assistance with these issues.
Social Security information is located at www.SSA.gov or you can contact our office. Whether you are planning for your parents or yourself, start early and seek professional help. Start early; do not wait for a crisis.
For more information, contact Living By Your Design, Inc., focusing on the issues of the elderly: legal, financial, and healthcare issues and free guidance for residential placement. Call: 309-285-8088. Website: www.LivingByYourDesignInc.com. Location: 809 W. Detweiller Dr., Peoria, IL 61615.
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