Who MUST Enroll in Medicare at Age 65?

[Chazm]

If the employer has less than 20 employees, they will need to enroll in both A & B when they turn 65. If they don't, they will incur a 10% penalty on their part B payment. In addition, Medicare would be considered primary insurer at that point, and the employer plan could refuse to cover services that should have been covered by Medicare.

And just so the OP doesn't get confused, it's 10% per year that they didn't have part B. Not just 10%

Also, I feel really bad for this posters clients. They are most likely on a high priced, high deductible small group plan and he can't explain to them how beneficial it will be for them to pick up Medicare and a supp.

 

[TN_agent]

I know this is nit-picking, but can someone point me to the Medicare documents that unequivocally state that you will be subject to part B LEP if you decline part b and your employer is less than 20 employees and you maintain your group coverage through active employment until enrolling in b?

I am advising a client on this very thing and don't want to get it wrong.

I know with 100% certainty of a different client of our agency who declined part b, worked for a company with 8 employees for 3 years until age 68 (using their employer benefits). This person was absolutely not assessed a part B penalty when they retired and enrolled in part B/ sup and has not been since (24+ months later)

Did this person just miraculously squeak by somehow?

 

[HeyMedicareMan]

And just so the OP doesn't get confused, it's 10% per year that they didn't have part B. Not just 10%

Also, I feel really bad for this posters clients. They are most likely on a high priced, high deductible small group plan and he can't explain to them how beneficial it will be for them to pick up Medicare and a supp.

Thanks for your reply despite your left handed put down of me, the thread starter when you write about feeling bad for this poster's clients because he(the poster) can't explain the benefits of jumping off the current, employer group plan. These clients are on a full, free ride on their employer group plan. Employer pays all premiums and reimburses all incurred expenses.... co-pays, co-insurance and deductible(s). This client and spouse will both be max IRMAA..... for both B and D. Although I'm new to the forum, I'm not new to Medicare having done MC since1998. A simple statement that all I needed to do was compare the costs and consequences of his current plan to the costs and consequences of MC, a supp and a PDP would have been sufficient. In fact I did that and that's what prompted my post in the first place. I wonder if I should assume you're one of "those" agents who pushes things down prospects' throats before they know ALL the facts.

 

[HeyMedicareMan]

TN_Agent, thanks for your reply and being a nit-picker and asking for full citation that unequivocally states that one would be subject to the LEP on parts B and D if one declines said enrollment when employer has less than 20 employees and maintains this employer group coverage through active employment until enrolling in B and D upon cessation of the employer group plan upon leaving (retiring) the group plan.

It is interesting to note that another agent has a similar situation.

It is also of note that your office has a case where-in there was no LEP.
In the cited case, did the small group plan pay submitted claims and the "Medicare pays first rules" did not apply at all because the insured, although eligible for MC, was in fact not enrolled in MC


My client's situation has some unusual "moving" parts. This client and spouse are reimbursed for premium, co-pays, deductibles and co-insurance on their present employer group plan. Both will face full IRMAA on B and D.

I am aware of how this client, if employed by an employer with more than 20 employees, would have no LEP if he declined and delayed B and D enrollment.
I can not find similar guidance when an "under 20 employees" employer is involved. People who have tried to be helpful and answered me have inferred consequences (LEP, no claims paying, client left holding the bag on logical or procedural basises) but I can't find a published, authoritative instruction or guideline from CMS.

I join you in asking --- where's the beef? .... er CMS guideline.

 

[vic120]

Wow It all has been shown in writing, Like anything else there will always be some that fall through the cracks, Ive seen this with occasionally some one who did not get a drug penalty, Think there was one on a thread recently who avoided drug penalty until he switched plan from one MA to another, there are also those that have to fight late penalties that should not have penalties.

The Fact's are in the documents already given

 

[WCMason]

I know this is nit-picking, but can someone point me to the Medicare documents that unequivocally state that you will be subject to part B LEP if you decline part b and your employer is less than 20 employees and you maintain your group coverage through active employment until enrolling in b? I am advising a client on this very thing and don't want to get it wrong. I know with 100% certainty of a different client of our agency who declined part b, worked for a company with 8 employees for 3 years until age 68 (using their employer benefits). This person was absolutely not assessed a part B penalty when they retired and enrolled in part B/ sup and has not been since (24+ months later) Did this person just miraculously squeak by somehow?

You won't likely find anything that states that an LEP will be assessed for an under 20 employees beneficiary who stays with their EGHP and does not take Part B. I have had several clients in the situation and none of them has been assessed an LEP. I was sure that they would and told the first couple of clients to expect one, but now I don't tell them that anymore because I don't believe there is one and I have searched without success for any documentation that there is a penalty in this case.

The Request for Employer Information form that gets them the SEP for Part B does not state anywhere how many employees the company has. Every client in this situation has turned in the Part B app and RFEI and every one got their SEP penalty free like every client with greater than 20 employees.

The big problem with not taking Part B when there are fewer than 20 employees is that Medicare is primary even if it is not taken. That means the employer plan could exclude the 80% that Medicare should pay leaving the beneficiary with essentially almost no insurance. I want to get this right like we all do, but my experience tells me not to believe these people will get an LEP until I see it either documented somewhere or assessed to a client.

The advice to this client is the same either way. Take Part B. The EGHP isn't worth much without it. And since the cost of the EGHP won't go down even though the benefits do, the best course is often to take a med supp instead of the EGHP as secondary. The exception might be if the client has a younger spouse who would have to go with COBRA or an IFP plan if the client dropped the EGHP.

 

[Midlevel]

I have had many over the years too come from a small group plan after age 65 and have never had any get the 10% penalty.

 

[vic120]

I have had many over the years too come from a small group plan after age 65 and have never had any get the 10% penalty.

I have had one that did not get penalty, And one that did.

Bottom line do you want to tell someone not to worry and then deal with it if it goes wrong

 

[sman]

The issue comes into play if the group plan requires the person to enroll in Medicare and the group plan becomes secondary. If the group plan isn't requiring them to move to Medicare Part B then there's a good chance they won't have an issue.

When the person is finally ready to enroll in Part B they will have to get the employer to complete the Request for Employment Information form which doesn't ask for the size of the group.

Again, the issue is what the group plan requires. Many times a small group plan (under 20) will require the employee to go on Medicare A & B. If the employer doesn't require it, then the employee should be fine in regard to avoiding a LEP when they eventually go on Medicare.

 

[TN_agent]

Wow It all has been shown in writing, Like anything else there will always be some that fall through the cracks, Ive seen this with occasionally some one who did not get a drug penalty, Think there was one on a thread recently who avoided drug penalty until he switched plan from one MA to another, there are also those that have to fight late penalties that should not have penalties.

The Fact's are in the documents already given

I am new to Medicare sales and just trying to learn as much as I can. No offense, I learn tons on here, but always want to be able to consult the CMS source material and don't want to have to say "I read about it on an online forum" if there ever is an E&O claim. The documents given so far, while very helpful, are not making it 100% clear to me that my particular client would be assessed LEP for part B when he does retire.

This client is an attorney who is going to want to see it in writing if he has to fork out 300+ dollars a month for part B coverage for years to come (and lose his open enrollment for supplements), and I need to be really sure I am advising him correctly.

Dropping off the work plan and going on Medicare+Supp+D would cost him a LOT. He is high income and would be assessed a LOT of income adjustments.

PLUS, he has a non-working spouse who is 60 and needs 5 more years of coverage at $1000+ a month (at least) for the same level of coverage as now. Right now 100% of their insurance is paid by the firm. I am not a CPA, but as far as I know he would be paying for all of this new insurance with after-tax dollars, since he is still employed (not self-employed) and makes so much money and the premiums, even at that high rate, would not be above 10% of income.

On the other hand, if I advise him to waive and he retires in say 3 years, a 30% part B penalty for life adds up as well if I have advised incorrectly. He does not want to take the B if he doesn't "have to".

The group agent that he is currently under (with our agency), has called the group carrier to be sure and they have said in writing they do not require him to take out part b in order to pay standard claims. I think that this may be the situation that sman is describing above.