Insurance
Home›Insurance›Health Insurance›Medicare can penalize late Part B enrollment after ret…
Medicare can penalize late Part B enrollment after retiree coverage
A 5-year delay in Medicare Part B can trigger a permanent 50% premium surcharge that increases over time, even if an employer’s retiree plan is described as lifetime coverage.
A recent explainer from Yahoo Finance highlights a common retirement mistake: some employer retiree health plans are not treated as “creditable coverage” by Medicare for the purpose of delaying Part B enrollment past age 65.
The article describes a newly retired executive who left a Fortune 500 job at 65 with what HR called generous lifetime retiree health coverage, but when he later applied for Medicare Part B, Social Security told him his premium included a permanent surcharge for the rest of his life.
According to the report, Special Enrollment Period protection for postponing Part B without penalty generally depends on group health coverage linked to current active employment, either the beneficiary’s job or a working spouse’s, and the enrollment clock starts when that job ends.
The piece also states that a Part B delay beyond 65 can create a “permanent penalty trap,” including a 50% surcharge on a $203 monthly premium after a 5-year delay, with the dollar penalty growing each year.