Knowing the right time to enroll in Medicare is a vital part of ensuring our clients have the best protection available in retirement. There are three major time frames for clients to sign up for their benefits, the Initial Enrollment Period (IEP), the General Enrollment Period (GEP), and a Special Enrollment Period (SEP).
Initial Enrollment Period (IEP)
A majority of Medicare beneficiaries are automatically enrolled in Parts A and B the month they turn 65 if they qualify for premium-free Part A and/or are already receiving their monthly Social Security benefits. For all others, there is a 7 month window to sign up for their Part A and/or Part B benefits, centered around the month they turn age 65. It includes the 3 months prior to their 65th birthday, the month of their birthday, and the 3 months following the month of their 65th birthday. Depending on when they sign up for their Part A/Part B during this 7 month window will determine when their benefits become active. Here’s a handy chart to help you understand these time frames:
|If you sign up for Part A (if you have to buy it) and/or Part B in this month:||Your coverage starts:|
|Before the month you turn 65||The month you turn 65|
|The month you turn 65||1 month after you sign up|
|1 month after you turn 65||2 months after you sign up|
|2 months after you turn 65||3 months after you sign up|
|3 months after you turn 65||3 months after you sign up|
Example: Mrs. Smith turned 65 in February but did not sign up for her Part B benefits until April, her Part B will go into effect on July 1st (3 months later).
If your client qualifies for premium-free Part A and/or they are already receiving their Social Security benefits they will receive their red, white and blue Medicare card 3 months prior to their 65th birthday with their A and/or B effective dates included automatically. For those who don’t automatically qualify for Part A and/or B it’s important that they understand the IEP and sign up during this time, as missing this period could result in costly penalties should they enroll in the future.
General Enrollment Period (GEP)
Beneficiaries who missed their IEP have an annual time to sign up for their Part A and/or Part B benefits called the General Enrollment Period. The GEP starts on January 1st and runs through March 31st each year, with their benefits going into effect the following July 1.
Example: Mrs. Smith has been on Part A since March of 2013, but signed up for her Part B benefits on January 5th of this year during the General Enrollment Period. Her Part B effective date will be July 1st, 2017.
Special Enrollment Period (SEP)
Today, many beneficiaries have chosen to delay enrolling into Part B of Medicare due to working beyond age 65 and being covered through an employer or union group health plan. For these individuals, a Special Enrollment Period exists for them to sign up for Part A and/or Part B outside of their IEP or the annual GEP called the Special Enrollment Period. Medicare’s website describes the SEP as follows:
Once your Initial Enrollment Period ends, you may have the chance to sign up for Medicare during a Special Enrollment Period (SEP). If you’re covered under a group health plan based on current employment, you have a SEP to sign up for Part A and/or Part B anytime as long as:
- You or your spouse (or family member if you’re disabled) is working.
- You’re covered by a group health plan through the employer or union based on that work.
You also have an 8-month SEP to sign up for Part A and/or Part B that starts at one of these times (whichever happens first):
- The month after employment ends
- The month after group health plan insurance based on current employment ends.
For clients who delay their Part B due to group or union coverage it’s important to understand this SEP and when they should take action. Even if the client leaves the job and is covered under COBRA or is now covered under a retiree health plan, they are still only given the 8 month window after employment ends to sign up for their Part A and/or Part B coverage. Failure to do so could lead to a late enrollment penalty if they sign up at a later date.
This is the first of a series of articles centered around enrolling into Medicare and will highlight some need-to-know items and things to consider for clients dealing with special circumstances.