Delaying your Part B and using a Special Enrollment Period (SEP)

This article explains how you can delay your Part B enrollment without a penalty by being granted a Special Enrollment Period (SEP) when you are ready to enroll down the road.

It is important to know when your personal deadline for enrolling in Part B expires, and when the late “penalty clock” starts ticking according to various circumstances: (Click HERE for more on your personal clicking time clock).

If you turn 65 and are not covered by group insurance provided by an employer for whom you or your spouse is still working, your deadline is at the end of your 7-month Initial Enrollment Period (IEP), which is at the end of the third month following the month in which you turn 65. For example, if your 65th birthday is in May, your IEP ends August 31.

You can usually delay signing up for Part B beyond age 65 without risking a Part B Late Enrollment penalty if:

(a) You are covered by a group health insurance plan from your employer or union and you are still working, or

(b) You are covered by your spouse’s group insurance and your spouse is still working.

If you lose this group health insurance or retire (or, if it’s your spouse who has the employer plan, when he or she retires), you’ll get a Special Enrollment Period (SEP) of up to 8 months to sign up for Part B without penalty. However, if you fail to enroll within this 8 month SEP, the Part B penalty clock is reset to the time when you retired or your group insurance ended, and NOT when your SEP expired. For example, let’s say you retire in March, triggering an 8 month SEP that lasts through November. You fail to sign up for Part B until the following General Open Enrollment period (January 1 through March 31). Since a full 12 months had elapsed (from the end of March to the end of Open Enrollment on March 31 of the following year), in this example you would incur a 10% Part B Late Enrollment penalty. This penalty will stay with you for as long as you are enrolled in Part B Medicare – which is essentially the rest of your life.

If you are in a same-sex marriage, you have the same right to delay Part B (and to qualify for a SEP later) if you are covered by your spouse’s employer insurance beyond age 65, wherever you live in the United States, even if your state doesn’t recognize same-sex marriage.

You do NOT qualify for an SEP, and therefore cannot delay enrolling in Part B past 65 without risking a late penalty if:

(a) Your (or your spouse’s) employer’s health plan automatically becomes “secondary” to Medicare when you turn 65, which may happen if the employer has fewer than 20 employees.

(b) You are retired (and not covered by your spouse’s employer group insurance) even if you have “Retiree health benefits”.

(c) You are covered by COBRA – temporary group health insurance from your last employer.

(d) You are covered by the employer group insurance of a domestic partner (whether opposite sex or same sex) to whom you are NOT married.

In all of the above circumstances, the Part B penalty clock starts ticking at the beginning of the month after your Initial Enrollment Period (IEP) expires.

• If you have individual health insurance (Affordable Care Act), the penalty clock starts ticking at the beginning of the month after your IEP expires. (With individual, rather than group insurance, you do NOT get an SEP if you delay enrolling in Part B, even if you continue working past age 65).
  
  
• If you become entitled to Medicare at a younger age through disability, your deadline may vary according to the same circumstances explained above, with three exceptions:
  
      1.) If you are covered by a group health plan provided by an employer for whom you or your spouse are working, you may be required to enroll in Part B if the employer has fewer than 100 employees.
  
      2.) If you are covered as a “family member” under the employer plan of your domestic partner, you are entitled to delay Part B without penalty until that employment ends, provided that the employer has 100 or more employees. 
   
      3.) If you miss your deadline for signing up for Part B and incur a penalty, the clock will be reset as soon as you turn 65. You’ll then be eligible for Medicare based on your age instead of disability and you will no longer have to pay the penalty.

• If you live outside the United States after you turn 65, and you are not working, the penalty clock starts ticking at the end of your IEP. To avoid a late penalty, you must enroll and pay Part B premiums, even though you cannot use any Medicare services while overseas. You do NOT get an SEP to sign up when you return home to live in the United States.
  
  
• If you are working outside the United States after turning 65, you are allowed a Special Enrollment Period (SEP) to sign up for Part B on your return if you have had American-style group health insurance from an employer or were covered by the National Public Health system of the country where you live; or had coverage from an approved American volunteer program. These rules also apply to your covered spouse. 

Click HERE for FACT SHEET on Deciding Whether to Enroll in Medicare Part A and Part B When You Turn 65 from CMS.gov

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