No Nice Way to Put It: This is Scary

A retiree (female) with superior group health insurance has a spouse (male).  That spouse (male), currently working, elects to accept his retiree-spouse (female) group insurance plan.  The retiree (female) turns 65, but that plan has no existing benefits for retirees at age 65.  The retiree (female) correctly signs up for Medicare Part B and a private insurance plan.  The working male, however, decides differently.  He (male) switches to his employer’s plan (he is also 65 years old), since the employee (male) is still actively working.  
The Working Spouse Retires
The working spouse (male) retires late in the same calendar year, and attempts to enroll in Medicare Part B, under the belief that he has qualified for a Special Election Period (SEP), because he has discontinued enrollment in his group plan.  That seems logical, right?  Nope.
Since the working male was utilizing his retired wife’s group health plan, the husband’s participation in the wife’s retiree group health plan doesn’t count for Medicare as continuation of creditable coverage.   Medicare rules that he has passed his first eligibility date under Medicare, and he has to wait for the General Election Period, and Medicare eligibility will begin only on the next July.  And, he is told that he will have to pay a 10% penalty for every 12 month period that he did not enroll for Medicare Part B.  That penalty will have no expiry, i.e. it will last forever.

Postlogue:  All is Well That Ends Well???
Yet another twist…the husband elected his employer’s group plan beginning the 1st of the month after he turned 65.  That is within his Initial Coverage Election Period (ICEP).  That means that his employer group plan DOES qualify for creditable coverage.  Therefore, when he retired, he WAS eligible for a SEP.  Tragically, he has been wrongly informed by the Social Security Administration.  He elevates the matter to Medicare, which rules in his favor.  He goes to the Social Security Administration office (again), and puts Medicare personnel in contact direct with SSA, and Medicare informs SSA of Medicare’s ruling.  SSA relents, and allows immediate enrollment in Medicare Part B.   The most overused three letters in the English alphabet certain do apply here.  OMG.

Moral of the Story
The bottom line here is that if you are turning 65, you will need to have some very extenuating circumstances to justify not enrolling in Medicare Part B.  Nevertheless, they do exist, and the man has taken extraordinary risk here.  I had to personally oversee all of the activity in bold above, until its final, and correct resolution.  In short, I have reasons for recommending that people enroll in Medicare Part B as soon as eligible, and here is a very strange situation, with the same conclusion.  You want $9.99 of value?  Descriptions of situations like this, to avoid outcomes like this, are included in “This Happens” throughout Maximize Your Medicare.

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