Monday, April 16, 2012

Medicare Part B: Dropping and Re-enrolling

 Medicare Part B: Dropping and Re-enrolling 

Question:  I will be 65 this year but plan to continue working. I have insurance through my job but I am considering taking Medicare and dropping my insurance through work. If I later change my mind and want to drop Medicare and go back on my insurance at work, can I do that?

Answer:  Yes, but there are guidelines that effect your options.

If you are receiving Social Security Retirement benefits you will be automatically enrolled in Medicare Part A and you must take Medicare Part A, you may not decline or drop it.

If your employer has less than 20 employees, their health plan is, in most cases Secondary to Medicare (or pays after) and you do not qualify to delay enrolling in Medicare Part B without incurring a penalty once you do enroll. If this is the case, you may enroll in Medicare Part B, drop it later and switch back to the employer plan but at some point you are going to lose that employer coverage and when you re-enroll in Medicare Part B you will be assessed a permanent penalty, generally an additional 10% of the premium for each 12 month period you go without Medicare Part B.

If your employer has 20 or more employees, their health plan is, in most cases, PRIMARY to Medicare and you qualify to delay enrolling in Medicare Part B without incurring a penalty once you do enroll or reenroll. So the scenario you described is an option.

Here are things you need to know before you do anything:

Most employers require a "qualifying event" to enroll or dis enroll from the plan outside annual enrollment. Turning 65 is a qualifying event and losing coverage is a qualifying event but voluntarily dropping Part B may not be considered a qualifying event and you most likely will have to wait until your employer's annual enrollment to reenter their health plan. Find this out from your HR person before you make your decision.

Find out from your HR person if your plan is Primary or Secondary to Medicare. If they don't know, call the phone number on your health plan ID card and ask them. Getting the answer in writing is not a bad idea in case problems come up down the road.

If your employer plan is Secondary to Medicare and you decide to do this anyway, you may only reenroll in Medicare Part B during Annual Enrollment January to March of each year and Part B will be effective July of that year. 

This scenario will also affect your enrollment in a Medicare Part D Prescription Drug plan and may result in delaying enrollment and penalties.

Some employers offer a wage offset if you are providing your own health insurance. You might want to see if that is a possibility.

Good Luck!

For answers to your Medicare Questions or to request a quote on a Texas Medicare Supplement or Part D Drug Plan visit .

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