Retiring with a coverage gap? How to avoid a Part B penalty

This situation can happen when you retire after enrolling in Part A, your own employer coverage ends, and your spouse's employer coverage begins later. A short gap does not automatically create a Part B penalty, but it can leave you without outpatient coverage.

Medicare generally adds 10% for each full 12 month period that you could have enrolled in Part B but did not. The added amount generally continues for as long as you have Part B. Medicare generally does not charge the penalty when you qualify for a Special Enrollment Period.

The Part B Special Enrollment Period generally continues for eight months after the employment or qualifying coverage ends, whichever happens first.

1. 1.Write down the date your employment ends, the date your current coverage ends, and the date your spouse's employer coverage begins.
2. 2.If you want Part B to begin when your current employer coverage ends, apply during the month before retirement. Medicare says coverage starts the month after Social Security receives the completed forms.
3. 3.Get written proof that you had employer coverage while you or your spouse was working. Medicare requires extra documentation of that coverage when you use this Special Enrollment Period.
4. 4.Ask Social Security to confirm your enrollment deadline using all three dates. Call one, eight hundred, MEDICARE if you also need help understanding Medicare's timing or a penalty notice.

A gap shorter than one full 12 month period would not by itself produce the 10% Part B penalty. However, Medicare counts the full period when you could have enrolled but did not, so Social Security should review your complete coverage history and exact dates.

Social Security handles Part B enrollment. Medicare is available at 1-800-633-4227 to answer Medicare timing, coverage record, billing, and penalty questions. Free State Health Insurance Assistance Program counselors can also help people understand Medicare costs and enrollment choices.