In Part 1, our colleague in the industry, Max Bernadsky, explained the enrollment periods and the basics around Medicare Parts A and B. In Part 2, he details more specifics on creditable coverage and penalties, and how to find a good Medicare agent.
What is Creditable Coverage?
Creditable coverage is something that comes up quite often as more and more Americans are working past 65. Creditable coverage is when you are covered under insurance provided by an employer-sponsored healthcare plan, either your own employer or that of your spouse. If you have coverage under an employer-sponsored health insurance plan, then you can usually wait to sign up for Medicare Part B without penalty. Then, when you lose that coverage, you can use the Special Election Period to sign up for Medicare Part B. If you have employer-sponsored health coverage for your entire life, even after you retire, you may never need to go on Medicare Part B unless you decide to drop your employer-sponsored coverage. When you turn 65, you should still enroll in Medicare Part A even if you have other coverage as this coverage does not carry a premium and will usually be secondary coverage to your current plan.
There are penalties that you can incur if you are not careful. These penalties will stay with you for the rest of your life. There can be a penalty for not signing up for Medicare, both Parts A & Parts B. Their can also be a penalty for not signing up for drug coverage. If you go without drug coverage and then try to add drug coverage later, you may be charged a penalty for each month you did not have drug coverage. This applies even if you did not need a drug plan because you were not taking any medication. Talking to an agent who specializes in Medicare before you turn 65 can help you avoid these penalties all together.
Finding an Agent
Medicare is an extremely important and confusing topic for most people. Every year they get dozens of calls per week and conflicting information. That is why it is vital that people who are reviewing their Medicare options find a trusted local agent specializing in Medicare that they can talk with every year. It is even more important to speak with an agent about Medicare as you approach age 65. This will give you all the information you need and allow you to see what timeline you need to follow to ensure that you are going to get the proper coverage at the proper time.
Disclaimer: Max Bernadsky is responsible for this content. Nothing in this blog is intended to be legal advice, nor is this blog intended to solicit any business for Houck Menninger Law, LLC. This blog is for informational purposes only.