UNITED STATES—Hello Toni: I have 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 8/1/2019 when I applied for Medicare Part A after turning 65 to 6/1/2022 and I may receive a Part D Late Enrollment Penalty. I had enrolled in Medicare Part B after losing my job due to a recent layoff.
I thought applying for Part B with the Medicare form signed from my HR department notified Medicare that I had been covered with employer benefits including prescription drug coverage. What do I do? I do not understand any of this! Jessie from San Diego, CA.
Jessie: Americans retiring or laid off after 65 with employer’s group benefits who are applying for Medicare Parts A and B must prove that they have “creditable” prescription drug coverage when applying for their new Medicare Part D.
Taking the “Request for Employment Information” form to Social Security to avoid the “famous” Medicare Part B penalty informs Medicare that you have had employer benefits since turning 65. The form does not inform Medicare that you had “creditable” prescription drug coverage.
The letter you received from the new Medicare Part D prescription drug plan which you enrolled in, explains what you should do to inform Medicare what prescription drug coverage you had by either calling an 800 number or has a form describing what type of coverage you had which you can mail back to the Medicare Part D plan you enrolled in.
Because America is overloaded with marketing material when enrolling in Medicare, many fail to open the important mail and understand the importance of notifying the specific Medicare Part D plan regarding what type of prescription drug coverage was received when leaving employer benefits.
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 if you join a Medicare drug plan late.”
The handbook does NOT advise what creditable coverage is. Creditable drug coverage should “meet or exceed” what Medicare’s Part D plan minimums are for that current year.
Puzzling, I know… Medicare does not regard discount prescription drug cards or low-cost generics programs as “creditable coverage.” These types of plans cannot keep you from the Late Enrollment Penalty.
Your late enrollment period (LEP) does not begin from the day you lose or leave your company health plan, BUT from the month your Medicare Part A 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. Do not wait past 63 days to get Part D when leaving company health plans. Need your Medicare LEP letter examined by a Toni Says® Medicare consultant, call 832-519-8664 or email firstname.lastname@example.org.
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.
Last week a Toni Says® Medicare client called asking a Toni Says® Medicare consultant about the letter they had received in May that was never opened and was to their 63-day look back period.
Sign up for the Toni Says® Medicare newsletter explaining Medicare rules at www.tonisays.com to better under the Medicare LEP penalty.