Avoid Penalties with This Simple Guide to Medicare Sign-Up Options

Avoid Penalties with This Simple Guide to Medicare Sign-Up Options

Oct 13, 2022


Avoid Penalties with This Simple Guide to Medicare Sign-Up Options

Medicare is designed to cover the health expenses of people above 65 years/older or people under 65 years with disabilities/end-stage renal disease/amyotrophic lateral sclerosis (ALS). The Social security beneficiaries will automatically enroll in the Medicare Plan after turning 65. What about non-beneficiaries? When do they need to sign up? What are the sign-up options for them to avoid penalties? Let us discuss.

Initial Enrollment Period (IEP)

It lasts for 7 months, including three months before your 65th birthday, your birthday month, and after three months of your birthday. You can sign up during this period to avoid penalties.

Annual General Enrollment Period

If you miss the IEP, you can sign up during Medicare’s annual general enrollment period, from January 1 to March 31.  However, your coverage will not begin until July 1st. Also, due to late sign-up, you will need to pay higher monthly premiums for part B coverage.

Circumstances When You Don’t Need to Sign Up for Medicare

You can avoid enrolling in a Medicare plan despite turning 65 if you have health insurance through your employer or partner.

Situations That Demand Signing Up for Medicare Despite Having Health Insurance

Having the following health insurance plans require you to enroll in a Medicare plan:

  • Affordable Care Act (ACA) –

    As per ACA, you must transfer your ACA plan to a Medicare plan after turning 65.


    This coverage for retired military members is considered secondary, so you should enroll in Medicare after 65 years, and then TRICARE will kick in for the services uncovered by Medicare.

  • COBRA –

    If you have enrolled in COBRA to extend your employer-sponsored health insurance, you cannot avoid late penalties for not enrolling in Medicare.

  • Retiree Health Plan – Like TRICARE, this is secondary coverage, so you must sign up for Medicare.

As Part A is mostly free, enrolling on time (although you have comprehensive health insurance) will help streamline your sign-up process for Part B when needed.

Medicare Late Enrollment Penalty

Coverage Type Penalty
Part A – If you don’t qualify for a free premium and you are late, Your monthly premium may increase by 10%
Part B – If you don’t qualify for the special enrollment period and didn’t enroll during IEP, Your monthly premium will increase by 10% for every 12 months you didn’t have Part B
Part D – If you don’t have credible drug coverage or don’t have drug coverage for 63 or more days, You will pay 1% for every month for the total number of months you didn’t have Part D (for example, if you didn’t have Part D for 25 months, you will pay 25% as a penalty)

Open Enrollment Period (from October 15 to December 7)

This is not the time for new enrollment, but you can switch from one Medicare plan to another based on your current needs.

Special Enrollment Period (SEP)

You may qualify for a SEP if you retire or lose employer coverage. You will have 8 months after losing either one to enroll in Medicare without a penalty.

Now, you know when you should sign-up for Medicare to avoid penalties, so act accordingly.

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