Don’t Get Tripped Up By Medicare Rules

  By Bruce Jentner
Bruce Jentner

I recently read about a financial advisor who retired at the age of 69. Because he liked his employer medical insurance plan, he continued his medical coverage under COBRA rather than enrolling in Medicare. Then, over the next year after his retirement, his medical insurance rejected a couple of his claims. Upon investigation, he learned his medical insurance plan considered itself to be the secondary payer because he was eligible for Medicare.

Don’t get tripped up by Medicare enrollment rules. When you turn 65, you normally need to enroll into Medicare within 3 months before the month you turn 65 or within 3 months after your birthday month.  However, if you are still working and are covered under your employer’s group health plan, you can forgo this Medicare initial enrollment period as long as you enroll within 8 months after the month you retire, even if you continue to be covered by your employer’s plan.

Sound complicated? It can get worse. If you miss the deadline and your employer coverage expires, you will not be allowed to enroll until the next Medicare general enrollment period which runs from January 1 to March 31. Additionally, your coverage will not begin until July 1, and you may be subject to a late penalty of 10% for each 12-month period you delayed enrollment – for the rest of your life!

Don’t take enrollment into Medicare for granted. Take a look at the rules, get help as needed, and make sure you enroll on a timely basis. Medicare is a valuable benefit for retirees, but like many government-sponsored programs, you need to play by the rules.

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