Dear Toni:
I just lost my job and I have had coverage through my job on myself and my husband who is a cancer patient. I am 70 and my husband is 69.
My question is: If we elect to take COBRA, should we enroll in Part B of Medicare or wait until COBRA ends to enroll in Part B? I’ve heard that if you have COBRA, you can wait to begin paying for Part B? Thanks, Margie from Bellaire.
Good Morning Margie:
The answer is simple! YES! You should not wait to enroll in Part B.
Make sure that your Part B begins the day you lose your company benefits or the day your COBRA plan starts. There is a time limit to enroll in Part B and not be subject to the 10% penalty per 12 month period. See pages 23-25 of the 2014 Medicare & You handbook on “Should I get Part B?”, when you were first eligible and what the late penalties are.
Many think the Part B rule starts when COBRA ends in18 months. They are not aware that the Special Enrollment Period begins the month they lose their company benefits or employment ends and go on COBRA. They enroll in Part B with a BIG SURPRISE….they find they are penalized 10% each year or 12 month period, you could have had Part B, but didn’t. The penalty goes all the way back to the day he/she turned 65 or the day Part A began. Margie, since you are 70 and your husband is 69, when you go to Social Security, then subtract 70-65 for yourself which is 5 years times 10%. There will be a 50% additional penalty on your Part B premium each month forever and for your husband subtract 69-65 which is 4 years times 10%. He will also have a 40% additional premium each month forever. All of the arguing with Social Security won’t help, it’s the rule.
I met a gentleman in Wharton, TX, who is 79 years old and always been on his wife’s company health plan. He never enrolled in Part B because she was the “working spouse”, but she lost her job…She is 62 and because she has health issues and the cost of COBRA is less than an individual health plan, she enrolled herself and her 79 year old husband in COBRA. When COBRA ended 18months later, they went to Social Security to enroll the husband in Part B and were extremely shocked!!! His premium for Part B is not $104.90. It was $104.90 plus $146.86 penalty for late enrollment or $251.76 per month. This is a 140% penalty (14 years x 10%) each month for the rest of his Medicare life. You say, “Toni, how can this be?” And here is the answer… He did not enroll at the right time!! It would have been best for him to have Part B in place when she had lost her company group health plan and enrolled in COBRA.
On page 21 of the 2014 Medicare & You handbook, it explains the Special Enrollment Period for those who did not sign up for Part A and/or Part B when first eligible as “during the 8-month period that begins the month after the employment ends or the group health plan coverage ends, whichever happens first”. After this 8 month period, the 10% penalty can begin. It does not say when COBRA ends. Read the “Note:” or last paragraph on page 22 which explains this rule completely.
My advice is always have Part B in place when leaving your job or losing your company benefits. Part B is so important because it covers so much of your health care and if you do not have Part B, then you will pay 100% out of your own pocket for what it covers.
Toni King, author of the new Medicare Survival Guide®, which is a simple guide that puts Medicare in people terms, is on sales at www.tonisays.com. Email questions or to schedule a “Confused about Social Security and Medicare Workshop” to www.tonisays.com/ask-toni
or call 832/519-TONI (8664).
