Many Americans already have health insurance until they reach the age of 65, either through their employer or through their spouse's employer. Those that want to put off enrolling in Medicare must exercise caution. They could face a lifetime of late payments if they don't have creditable coverage, as described by Medicare. In this article, we'll go over what creditable coverage entails in Medicare and how to avoid fines by delaying enrollment.
Your plan would have creditable coverage, which means it must cost at least as much as Medicare.
The Medicare Modernization Act (MMA) allows your insurance company to tell you whether you have creditable coverage if you are eligible for Medicare. This provision only extends to prescription drug coverage provided by employer and union contracts.
When you enter the plan or program, you must receive a notice of creditable drug coverage. It must also notify you once a year, before October 15th, when Medicare Annual Enrollment begins.
This notice should be held with your medical records or other legal documents. When you plan to participate in Medicare, you can avoid late fees by submitting a copy of this notification.
When it comes to Parts A and B (Original Medicare), many forms of insurance do not qualify as creditable coverage, but they do for Medicare Part D.
Parts A and B are not creditable
Check the Notice of Creditable Coverage to see if you're eligible for Part D coverage.
Employs less than 20 people
If you have both, Medicare is the main insurer
Enroll in Original Medicare as soon as you are registered to avoid late fees. You'll have to pay premiums for both if you keep your employer-sponsored plan. However, depending on the specific situation, this could be less expensive than paying co-insurance.
You will want to participate in Medicare if you have creditable coverage through your employer. If you do, Medicare will take over as the secondary insurance provider. You would, of course, pay your monthly Medicare Part B premium in addition to your employer-sponsored plan's premium.
The majority of people, however, are eligible for premium-free Medicare Part A. That's why, even if you postpone Part B, we almost always suggest enrolling in Part A as soon as you're qualified for Medicare. It works in conjunction with your primary insurance, leaving you with little or no out-of-pocket expenses if you need emergency treatment.
And if you have a Health Savings Account (HSA) is there an exception. You will no longer contribute to your HSA until you participate in some part of Medicare. If your spouse has an HSA, he or she will continue to make contributions after you enroll in Medicare.
No, creditable coverage does not include all employer-provided coverage. To be qualified, the company must have a workforce of at least 20 employees. Furthermore, you (or your spouse) must be employed full-time. That means that even though you keep your insurance when you retire, it will no longer be creditable because you are no longer employed. The same is valid if your spouse's employer-provided the benefits and he or she retires.
Also Read: Medicare Plan Terms Employers Need to Know
Creditable coverage for Part D
Not creditable for Parts A and B
Many veterans refuse to enroll in Medicare. They don't always realize that their VA benefits do not exclude them. Others do not believe that Medicare is essential in addition to their existing coverage. Please keep in mind that VA benefits are subject to the whims of Congress. Coverage is often dependent on the specifics of your service.
The incredible benefits, which include a pension and full medical coverage, are one of the reasons many federal employees choose government service in the first place. Please keep in mind that FEHB is not considered creditable insurance.
We encourage beneficiaries to closely compare their prices. Many people's FEHB rates have risen to the point that Medicare is now cheaper. One of our licensed agents will assist you in weighing your choices to decide whether Medicare or FEHB will result in higher out-of-pocket costs. You have the option of enrolling in both.
The following are not eligible for Medicare Parts A or B credit.
ChampVA: You must enroll in Medicare not only to reduce late fees but also to retain your ChampVA benefits.
TRICARE: You must enroll in Medicare as soon as you are eligible, much like ChampVA, or you will lose your TRICARE benefits.
COBRA: You have eight months from the start of COBRA to enroll in Medicare without incurring late fees.
Retiree insurance: You have 63 days after retirement to enroll in Medicare without penalty.
Check with your benefits administrator or look at your most recent Notice of Creditable Coverage to see if you're covered for Part D.
You will participate in Medicare without penalty if you have creditable coverage before you turned 65 and decided to postpone enrollment. Take the following steps:
Sign up in person at your local Social Security office, bringing a copy of your Notice of Creditable Coverage with you.
Enroll within two months of your existing plan expires.
Request a Notice of Creditable Coverage from your employer or benefits administrator for each part of Medicare for which you missed enrollment.
Please keep in mind that just because you have creditable coverage doesn't mean it's better than Medicare or can save you money out of pocket. It's always worthwhile to take the time to weigh your choices.
It's just a phone call away from speaking with one of our licensed officers.
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