If you have Medicare and are ready to retire, there a few things you need to know.  When people call me who are going through this they are worried about “penalties”.  In most cases the penalties do not apply.

Some people will never apply for Medicare until they retire. In that case, you will assigned a retroactive Part A date (The 1st day of the month you turned 65) and your Part B should start the first day of the month you will no longer be covered under your employer’s plan.

A late enrollment penalty for Part B would only apply if you did not take Part B while you were working and the company you work for has under 20 employees. If this applies to you, you need to take Medicare Part B when you turn age 65. If you do not, you will be penalized 10% of your Part B premium each year you missed. If you go 5 years, than the penalty would be a 50% increase on your Part B premium.  This penalty will remain with you for as long as you live or as long as you maintain Part B.

If you work for a company with over 20 employees, you can delay Part B until you retire and no penalty will apply.

Ideally, 3 months before you are ready to retire you will need to have 2 sets of forms filled. One for you and one for your employer. (CMS40B-E, personal form and CMS-L564E, employer form) The original copies of both forms (NO COPIES) need to be delivered to Social Security.

Once these forms are completed you can either mail them into Social Security or go into your local Social Security office (which I recommend).  Have your Part B start the first day of the month you are going to lose your health coverage through your employer.

Once that is completed, you can get to work on finding the best coverage for yourself. Giving yourself three months will allow you ample time to locate the best coverage for yourself. However, if you work with the folks at Dave Silver Insurance, we will do all the leg work for you.

One more thing I forgot to mention. If you have coverage through your employer, there is no late enrollment penalty for Medicare Part D prescription drug coverage.

Many people worry when they are about to retire and are going to lose their health coverage. You need to work with someone who will tell you exactly what you should do.  The very best advice I can give is not to wait to the LAST MINUTE and work with someone knowledgeable and who can walk you through the entire process!!!