Can COBRA cause a Medicare Part B penalty?
I lost my job July 2017. My wife and I have enrolled in Medicare Part B in January 2019 since COBRA’s almost over, now I am finding out that there will be a penalty for us not enrolling when we should have. I have never received a Medicare & You handbook to know how or when to enroll in Medicare properly. I was unaware of an eight-month Medicare Part B enrollment rule. Thought I had to wait until our COBRA ended to enroll in Medicare Part B.
We are now 70 years old and Social Security said in a letter we received last week that the Part B penalty for us is each 50 percent because it is five years since we were 65. Please inform your readers how important it is to enroll at the correct time.
Rick from San Antonio
You are right that people should not wait to enroll in Medicare Part B when no longer working full-time with true company benefits. Enrolling in COBRA does not keep one from the “famous” Medicare Part B penalty. America needs to be aware that this penalty can be extremely costly and will last until you pass away or are no longer on Medicare.
The Medicare & You handbook explains that the 8-month Medicare enrollment rule after 65 begins the month after one is no longer working full-time or your employer group health benefits ends, whichever comes first. The handbook also states that COBRA or retirement benefits are not considered coverage based on current employment.
During a Toni Says® Medicare consultation, we advise those leaving employer benefits after 65, to enroll in Medicare Part B as soon as possible. Don’t wait!
Many enroll in their Part B with a BIG SURPRISE like you have Rick … they find they are penalized because they could have had Part B but didn’t enroll. The penalty goes all the way back to the day he/she turned 65.
I have a client who is 79 years old and had always been on his wife’s company health plan. He never enrolled in Medicare’s Part B because his wife was the “working spouse,” but she lost her job. She was 62 and because she had health issues and the cost of COBRA was less than an individual health plan, she enrolled herself and her 79-year-old husband in COBRA.
When COBRA ended 18months later, they went to Social Security to enroll him in Part B and were shocked! His premium for Part B was not $135.50. It was $135.50 plus $189.70 penalty for late enrollment for a total of $325.20 per month. This was a 140 percent penalty (79-65) which is 14 years x 10 percent each month for the rest of his Medicare life. He did not enroll in “Part B” at the right time or the correct way!
What happens when the Medicare Part B premium increases? Your penalty amount will increase. The penalty amount will not stay the same each year.
Toni Says®: Always have Medicare Part B in place when leaving your job or losing your company benefits and want to enroll in COBRA because the penalty goes back to the day you turn 65. Chapter 1 of the new Medicare Survival Guide Advanced edition explains the rules of enrolling in Medicare the right way.
Is the maze of Medicare confusing you? Visit www.abbs4u.com and attend ABBS (American Baby Boomer Society) Medicare courses for more Medicare education.
Toni King, author of the Medicare Survival Guide® is giving a $5 discount on the Medicare Survival Guide® Advanced book and bundle packages for the Toni Says® newspaper article readers at www.tonisays.com.