Hello Toni:
I turned 65 in March 2012 and continued to work full time with excellent company benefits. I decided to delay Part B until December 1, 2014 when I have retired. I enrolled in a Medicare supplement plan F and a Part D prescription drug plan and now I have a Part D penalty?
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 3/1/2012 to 11/31/2014” and I may receive a Part D late enrollment penalty. I thought applying for Part B keep me from a Part D penalty. Can you please advise me what to do? Lou, a West U Examiner reader
Hi Lou:
I understand your uncertainty because most people who are turning 65, “still working” full-time with true group benefits (not individual health plans) and delaying their Part B and D are also confused! Many who were working fulltime are applying for Medicare benefits and because they are older than 65 have to prove they have “creditable coverage” for Part D.
Medicare 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 paragraph above from the Medicare & you handbook, does NOT advise what creditable coverage is. Creditable drug coverage should “meet or exceed” what Medicare’s Part D plan minimums are. The minimum deductible for 2015 should at least be $320 or less and a maximum out of pocket not more than the average Medicare Part D plan. The benefit amount should be unlimited, so if your plan has a limit or cap it is not creditable.
Puzzling, I know… Medicare does not regard discount prescription drug cards, Wal-Mart, Kroger and HEB low cost generic plans as “creditable coverage”. If you believe these plans can keep you from the Late Enrollment Penalty, I hate to tell you that you’re WRONG!! BUT…Medicare DOES consider receiving your prescription drugs from the VA as creditable coverage. So the VA is OK!!
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. If your Medicare began 09-01-2010 and you left your group plan on 09-01-2014, which is 48 months then, your penalty will be 48 times
$ .33(that is this year’s 1% penalty based on $33.13, which is the national base beneficiary premium) totaling $15.84 per month for as long as you have Medicare. This penalty can be because:
- Your company prescription drug benefits (not health benefits) are not creditable as Medicare declares.
- You simply never enrolled in Medicare Part D when you were first eligible and want to enroll at a later date. Or you wait past the 63 days without creditable prescription drug coverage when you are leaving company benefits.
Need help with proper Part D planning, contact Toni at her email in this article.
Toni King, author of the Medicare Survival Guide® is on sales at www.tonisays.com. Email questions to www.tonisays.com/ask-toni.
