Diane Omdahl Contributor Feb 4, 2019, 03:15pm
Being on COBRA after age 65 is like hiking in the woods. It's great
until a snake jumps out and bites you. Just ask any of the five beneficiaries I
talked to last week. Here’s a typical situation.
John, 68 years old, lost his position in September 2017. He enrolled in
Medicare Part A and COBRA. He was told he didn’t need Part B because the COBRA
plan provides the same coverage he had for years. Now, because the coverage
will end in February, he has re-started the Medicare enrollment process.
To his surprise, he discovered that the only time he can enroll in Part B,
medical insurance, is during the General Enrollment Period, January 1-March 31.
He also learned that he cannot sign up for additional coverage (either a
Medicare Advantage plan or a Medigap policy and Part D drug plan) until April
and nothing will take effect until July 1. Plus, he will pay a Part B late
enrollment penalty. (The penalty increases the Part B premium by 10 percent for every
full year without Part B. This year the penalty amount is $13.55 for one year.)
John was two full years late enrolling so he will pay twice that, an additional
$27.10 each month.
What happened?
In order to defer Medicare enrollment past age 65, an individual must have
coverage through a group health plan, sponsored by an employer, that is related
to (connected with) current employment.
John did not know that, while he was still working, he had an eight-month
window, a Special Enrollment Period (SEP), to enroll in Part B. If he had taken
action during that time, there would have been no penalty or delay in coverage.
Now, because John is no longer employed, he does not qualify for a SEP and, as
a result, he faces a delay in coverage and a Part B penalty.
What if you want COBRA?
If you're over 65 and considering a COBRA continuation plan, don't get bit.
Enroll in Part B.
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