Medicare Part B LEPs

Understanding Medicare Part B LEPs: How to Avoid Them and Dispute Errors

Enrolling in Medicare is a crucial step to secure affordable healthcare for those who qualify. However, missing the enrollment window can be a costly mistake. If this happens, a beneficiary will face Medicare Part B LEPs (Late Enrollment Penalties). In this post, we explain what the penalty is, how to avoid it, and how to dispute it if it is applied in error.

Watch a video on OEP, SEPs & late Part B enrollment

What Is a Medicare Part B LEP

Medicare Part B covers outpatient services like doctor visits, preventive care, durable medical equipment, and more. If the beneficiary doesn’t sign up for Part B when they’re first eligible, and they don’t qualify for a Special Enrollment Period (SEP), they may receive a monthly penalty that lasts a lifetime.

Here’s how it works:

• The penalty is 10% of the standard Part B premium for every 12-month period the beneficiary was eligible but didn’t enroll.
• CMS adds it to the monthly premium as long as you have Part B; most likely for the rest of your life.

Example:

If the beneficiary delays Part B for 2 full years without a valid reason, the penalty will be 20% of the standard monthly premium.

When Can You Delay Enrollment Without Penalty

You can delay Part B without a penalty if you have creditable coverage. This generally means you receive coverage under an employer-sponsored plan through your (or your spouse’s) active employment.

You qualify for a Special Enrollment Period (SEP) if:

• You or your spouse are still working past age 65.
• You’re covered under a group health plan from that employment.
• You enroll in Part B within 8 months of losing that coverage or stopping work; whichever comes first.

How to Avoid the Part B LEP

1. Know Your Initial Enrollment Period (IEP). The IEP is a 7-month window. It begins 3 months before th emonth you turn 65, includes your birth month , and ends 3 months later.
   
2. Enroll During a Special Enrollment Period (if eligible). Those working past 65 and have employer coverage shoul dkeep proof of coverage. This may qualify them for an SEP.
   
3. Get Written Confirmation of Creditable Coverage. Keep documents from your employer or insurance provider to prove your coverage was creditable.
   
4. Don’t Assume COBRA or Retiree Coverage Counts. These type of coverage do not qualify as creditable to delay Part B enrollment without a penalty.

What If You’re Penalized by Mistake

If you receive a notice of a Part B LEP and believe it’s in error, you have the right to appeal.

Steps to Dispute a Medicare Part B LEP:

1. Request a Reconsideration
   Contact the Social Security Administration (SSA) and request Form CMS-L564 (Request for Employment Information) and Form CMS-40B (Application for Enrollment in Medicare – Part B).
2. Gather Proof
   Obtain proof of your creditable coverage, such as:
   • Employer letters
   • Pay stubs showing active health coverage
   • Group health insurance policy documents
3. Submit Documentation Promptly
   Include a letter explaining your situation and attach your documentation. Send it to your local Social Security office or follow instructions provided with the reconsideration request.
4. Follow Up
   Appeals can take several weeks. Keep a record of all communication and follow up regularly.

Medicare Part B LEPs are more than just a financial nuisance; they’re a lifelong burden if not handled correctly. Fortunately, with proper planning and awareness of enrollment timelines, they are entirely avoidable. If a mistake does occur, don’t panic. There is a clear process in place for disputes, and with strong documentation, many errors can be successfully overturned.

If you’re approaching Medicare eligibility or navigating coverage options, consider consulting with a licensed Medicare agent to help guide you through the process.

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