People with Medicare Beware- COBRA is Not Coverage as a “Current” Employee
There is an increase in the number of Medicare beneficiaries who are delaying beyond age 65 to enroll in Medicare Part B. They are thinking that because they pay for and receive health coverage under COBRA that they do not need to enroll in Medicare Part B. This is incorrect and comes with heavy penalties.
The beneficiary who does not enroll during the initial enrollment period at their 65th birthday must wait to enroll in the next general enrollment period (January-March) and the coverage does not begin until July 1st of that year. Further, there is a 10% late penalty assessed to the standard monthly premium for every 12 months of delayed enrollment in Part B. This penalty has no durational limit, so it continues for the lifetime of the Medicaid beneficiary.
Beneficiaries may, however, qualify for a Special Enrollment Period to enroll in Plan D if the drug coverage they had under COBRA is considered creditable coverage. The individual will have to pay a penalty if there is a continuous period of 63 days or longer after the individual’s initial enrollment period.
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