UNITED STATES— Hello Toni: I received a notice from CMS (Medicare) saying they do not have record of me having prescription drug coverage that “met Medicare’s minimum standards from 8/1/2015 to 3/1/2019 and I may receive a Part D late enrollment penalty. My HR director told me not to worry because the employer health plan has creditable coverage. Now I am receiving a Late Enrollment Penalty.
I thought creditable coverage kept me from a Part B penalty. Now I am finding that was wrong. How am I getting a Part D late enrollment penalty? I did not enroll in a prescription drug plan immediately because I had a 90-day supply for my prescriptions and did not need to receive any. Now I must wait until Medicare Open Enrollment this fall to enroll in a Part D plan, and I am told that I will have a Part D penalty. Please explain! Thank You, Sydney from Atlanta, GA.
Sydney: I’m sorry, but you waited too long to apply for a Medicare Part D plan. Once you are past 65 and/or leaving creditable coverage, Medicare gives you 63 not 70 or 90 days to apply for a Medicare Part D or Medicare Advantage plan with prescription drug coverage. Not needing to order your prescriptions does not refrain from receiving Part D penalties. It is enrolling within Medicare’s specific timeline.
Your late enrollment period (LEP) does not begin from the day you lose or leave your company health plan, BUT from the month you turned 65 or began your Medicare and is based on when Part A of Medicare begins not Part B.
This LEP (late enrollment period) penalty can be because:
1) You waited past 63 days without creditable prescription drug coverage when you are leaving company benefits and you are older than 65 years old and 90 days. Don’t wait past 63 days to get Part D when leaving company health plans.
2) Your company prescription drug benefits (not health benefits) are not creditable as Medicare declares.
3) You simply never enrolled in Medicare Part D when you were first eligible and want to enroll.
Your company prescription drug benefits met Medicare’s “creditable coverage” rule, but you waited past the 63-day window to apply. Now you have been denied coverage due to not following Medicare’s LEP (late enrollment penalty) rule and will receive a Part D penalty when you can apply.
You must wait until the next Medicare Open/Annual Enrollment period from October 15-December 7 to enroll in a Medicare Part D prescription drug plan with your effective date to be January 1, 2020. The Part D plan can be either stand-alone or a Medicare Advantage with Prescription Drug coverage.
Americans retiring after 65, that are leaving company health plans and applying for Medicare Parts A and B must prove they have “creditable coverage” when applying for Medicare Part D prescription drug plan only.
The Medicare & You handbook states: “Creditable prescription drug coverage could include drug coverage from a current or former employer or union, TRICARE, Indian Health Service, the VA or health insurance coverage. Your plan must tell you each year if your drug coverage is “creditable coverage.” This information may be sent to you in a letter or included in a newsletter from the plan. Keep this information because you may need it when or if you join a Medicare drug plan late.”
Is the maze of Medicare confusing you? Visit www.abbs4u.com and attend ABBS (American Baby Boomer Society) Medicare courses for more Medicare education.
If you are still confused and would like to discuss your specific Medicare circumstances email email@example.com and the Toni Says® team can help you.
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