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Roadmap to Medicare Turning 65 COBRA

More information on

Medicare and COBRA

Customized Roadmap Report

Click on the image to download your 1 page Roadmap

Enrolling in Medicare

After reviewing ALL of the information on this webpage, click on Enroll Now for detailed enrollment instructions based on your situation.

Since Medicare is most likely your PRIMARY Insurance, and you may have penalties and deadlines for not enrolling in Medicare, you may want to...

Your enrollment process depends on if you are already collecting social security income before your 65th birthday.

Not previously collecting Social Security Income

The easiest way to enroll is to visit www.ssa.gov/medicare.

Click here for step by step Directions – How to Enroll Online

Already collecting Social Security Income

You should not have to take any action to enroll in Medicare. Please expect to see your new Medicare ID card in the mail approximately 3 months before your 65th birthday. Your effective date will be the first of the month of your 65th birthday (unless your birthday is on the 1st, then it will be effective the 1st of the prior month).

Your Roadmap is based on…

  • You are approaching age 65
  • Your Primary Insured IS NOT (or WILL NOT be) actively working at the employer providing your benefits
  • You ARE (or WILL be) covered under the group health COBRA plan

Do I need Medicare to have full coverage?

Yes/Likely.  Once you turn 65, it is likely that your COBRA coverage will become secondary coverage and Medicare will become the primary insurance.  If you do not enroll in Medicare, you may not have full coverage.

  • Questions to ask your COBRA plan when you turn 65:
    • Will my benefits change now that I am turning age 65?
    • Will my premiums change?
    • Will I lose my COBRA if I enroll in Medicare?
    • Can my spouse get this benefit if I do not enroll?
    • Will benefits and/or premiums change for my spouse should my passing occur first?
    • Will the COBRA plan act as primary insurance or do I need to have Medicare A and B as primary insurance to my plan?

If you wish to defer enrollment in Medicare A and/or B, please confirm from your COBRA plan health insurance carrier (in writing recommended) that they will remain the primary payer or you could have significant gaps in your coverage.

Medicare “Who Pays First” Law states since COBRA is not based on active employment, Medicare becomes the primary insurance once you turn 65.

Even if your COBRA plan says that they will remain the primary insurance and Medicare is not necessary, it may still be worth enrolling in Medicare within enrollment period and penalty timelines so you do not get temporarily locked out or get a penalty if you decide to enroll in Medicare later.  You will not have a valid enrollment period into Medicare when COBRA expires.

Will I receive a penalty if I don’t enroll now?

Yes. You will receive a late enrollment penalty because COBRA coverage is not considered creditable coverage to Medicare.  Creditable coverage is defined as group coverage based on current active employment.  COBRA is not based on active employment.  

Part A: If you are eligible for Premium-Free Part A (you or your spouse has paid 40 quarters of Medicare taxes), you WILL NOT receive a Part A Penalty for enrolling after age 65.

  • Since Part A is Premium-Free for many people, they commonly enroll in Part A even if not necessary (special considerations apply if you have an HSA account).

Part B: You will receive a Part B Late Enrollment Penalty if you do not have creditable coverage after age 65.

  • Creditable coverage is group health insurance coverage while the Primary Insured is actively working for the employer providing the Group Health Plan.
    • Severance, COBRA and/or Retiree Plans are not creditable for avoiding the penalty.

A 10% penalty added for every 12 months you go without creditable coverage. Months need not be consecutive. See Details on how the penalty is calculated.

  • The penalty will be assessed on the Base Medicare Premium ($144.60/month in 2020) for as long as you are enrolled in Medicare.

Part D: You will receive a Part D Late Enrollment Penalty if you do not have creditable prescription coverage after age 65.

  • Creditable prescription coverage is drug coverage that is expected to pay, on average, at least as much as Medicare’s standard prescription drug coverage.

A 1% penalty added for every 1 month you go without creditable prescription coverage. Months need not be consecutive.

  • The penalty will be assessed on the Average Medicare Part D Premium ($32.74/month in 2020) for as long as you are enrolled in Medicare Part D.

What is my deadline to enroll?

Your Initial Enrollment Period (Turning 65) is 7 months surrounding your 65th birthday to enroll online.  Your effective date will be automatically assigned to you based on which month you enroll online. 

Part A: As long as you are eligible for “premium-free” ($0) Medicare Part A, you can sign up for no cost Part A (if you’re eligible) any time during or after your Initial Enrollment Period. Your coverage start date will depend on when you sign up.

  • If you have to pay a premium for Medicare Part A, you can only sign up during a valid enrollment period (see Part B enrollment periods below).

Part B-IEP: You have a 7 month Initial Enrollment Period when you turn 65 (3 months before birthday, month of birthday, and 3 months following birthday)

  • If you enroll within the 3 months prior to your 65th birthday month
    • Your effective date will be the first of the month of your 65th birthday (unless your birthday is on the 1st, then it will be effective the 1st of the prior month).
  • If you enroll during your birthday month or 3 months following

Part B-GEP: If you miss your Initial Enrollment Period, you will be able to enroll annually during the General Enrollment Period (however, penalties may apply).

  • The General Enrollment Period is from January 1st to March 31st each year. Your Part B effective date will be July 1st following your enrollment.

Secondary Insurance Options

Since your COBRA benefits are likely considered secondary insurance to Medicare, you MUST be enrolled in Medicare A and B to have full coverage.  You may have the option to keep your COBRA Plan as secondary or elect a Medicare Supplement and Medicare Prescription Drug Plan as secondary.

Does it make sense to drop my COBRA plan to enroll in a Medicare Supplement Insurance and a Medicare Prescription Plan?

A general rule of thumb is that if your COBRA plan costs on average less than $150-200/month/person or about $2000-2400/year/person, then your COBRA plan is more cost effective than Medicare.

  • Please add up the premiums, copays, deductibles and coinsurances (everything except Rx cost) of your COBRA plan for comparison.

However, if you think you may pay more than that, or you are seeking lower deductibles and copays, then you may want to explore a Medicare Supplement further.

Please contact us for a Medicare Cost Analysis to help you better evaluate if your COBRA or a Private Medicare Supplement and Medicare Prescription plan is more cost effective.

    • If Medicare Secondary coverage is more cost effective than your COBRA plan, you may want to replace your COBRA plan.

Underwriting Considerations

Medicare Supplement Insurance has an Open Enrollment Period for the first 6 months that you are enrolled in Medicare Part B.  During this time, you will be able to purchase ANY medicare supplement plan with no medical underwriting.

If you stay with your COBRA plan and decide to elect a Medicare Supplement later (when COBRA ends, but you have already been on Medicare for more than 6 months) you will have SOME plans available on a Guaranteed Issue basis.  There will be less options available that do not require you to answer medical questions to qualify.

Medicare Advantage Plans and Medicare Prescription Drug Plans provide an Initial Election Period when you enroll in Medicare, a Special Election Period when you come off your COBRA plan, and also allow you to change plans once a year during the Annual Election Period (October 15th through December 7th) without medical underwriting.

Additional Considerations

Effective Date Considerations- Reminder, when you apply for Medicare at age 65, you cannot choose a specific effective date for the benefits (and premiums) to start.  The only way to influence the effective date is by which month you enroll online.  Please contact us ASAP if you are trying to achieve a specific start date that is something other than the first of the month of your 65th birthday (possibly to coordinate with your group plan ending).

Important HSA Considerations– You cannot continue to contribute to your Health Savings Account (HSA) once you enroll in Medicare Part A.  If you are enrolling in Medicare after age 65, your Part A effective date may be back dated up to 6 months.  Please contact us to discuss the HSA maximum contribution rate for you circumstances.  Click Here for Details and Rules.

  • This does not apply to Flexible Spending Accounts (FSA) or Health Reimbursement Accounts (HRA).  Medicare does not have any restrictions on these types of accounts.