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Medicare SEP Rules – Medicare Part B Special Enrollment Period Rules

Every agent knows about the Annual Enrollment Period (AEP). It’s often the busiest time of the year and it is when the majority of prospective clients are enrolled in insurance plans. There are, however, exceptions. Special Enrollment Periods, often known as SEPs, are periods of time outside of the AEP when someone can enroll in health insurance. These SEPs are usually prompted by a specific change in personal circumstances. For Medicare Part B, or medical insurance, SEPs are necessary because Medicare Part B is optional, while Part A (hospital insurance) is not. What are the Medicare SEP rules?

When Does It Start?

The Part B Special Enrollment Period starts when a person has coverage from their employer (called job-based insurance) and is simultaneously in their first month of eligibility for enrollment in Part B. The SEP ends eight months after the person loses coverage from that employer, either by end of coverage or unemployment. If they enroll in Part B coverage during their Special Enrollment Period, then the beneficiary can avoid paying the Late Enrollment Penalty (LEP), as well.

In most cases, it would be recommended to enroll in Medicare before the person loses their job-based coverage in order to avoid gaps in healthcare.  It is important to understand the SEP rules.

How Do I Enroll? – SEP Rules

There are two steps to enrolling in Medicare Part B during the SEP.

1. Contact the Social Security Administration (SSA)

The SSA can be reached at 800-772-1213. The prospective beneficiary can then request forms. The forms they will need to fill out are CMS 40B (application to enroll in Medicare) and CMS L564 (request for employment information). Both of these are needed to complete the process.  However,  the beneficiary should fill out CMS 40B and their employer should fill out CMS L564. If there are multiple employers, each one should receive a copy of the CMS L564 to fill out.

2. Submit all forms to the SSA

Once all the information has been gathered, the forms must be dropped off either at a local SSA office or they can be sent to the mailing address. Locating a local SSA office or their mailing address can be done at their website.

Licensed Agents – Medicare SEP Rules

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Medicare Special Enrollment Periods

While Medicare Annual Enrollment Period is only for several weeks out of the year (October 15 to December 7), there are certain events that qualify beneficiaries for enrolling in Medicare coverage outside of that time period. Chances to make a change to coverage are called Medicare Special Enrollment Periods (SEP). There are different rules that govern what beneficiaries can do depending on the type of qualifying event.

The most common qualifying life events that result in a special enrollment period are the following:

Change of residency

Sometimes, moving living locations results in a special enrollment period because the new residence is no longer in range for the coverage that the previous plan provided. When this happens, the beneficiary must notify the plan’s carrier. If the beneficiary notifies, then they will have about a two month window to make adjustments to their coverage, like choosing a new plan. If they do not choose another Medicare Advantage plan, they will be enrolled in Original Medicare when they are disenrolled from their previous plan.

Loss of current coverage – Medicare Special Enrollment Periods

This most often occurs when a beneficiary is enrolled in Medicaid and then is no longer eligible due to changing life circumstances like increased income or loss of disability status. The beneficiary can then switch to Medicare Advantage, drop the Medicare Advantage plan and return to Original Medicare, or drop the coverage that they previously had without making other changes. This will result in a lapse in coverage.

Opportunity for other coverage

A beneficiary can drop their Medicare Advantage plan and/or Part D plan if  an opportunity for other coverage arises.  Offers include as an insurance plan offered by or subsidized by a union or employer.  This special enrollment period can occur whenever the beneficiary is offered alternative coverage.

Plan changes its contract with Medicare

Sometimes, Medicare takes an official action called a sanction to protect beneficiaries. If sanctions occur, the contract the insurance carrier has with Medicare will be different and those differences will affect the plans that beneficiaries are enrolled in. If this happens, the beneficiary can enroll in a different Medicare Advantage plan offered by the same or a different carrier.

Other special circumstances – Medicare Special Enrollment Periods

There are multitudinous other circumstances that may result in a special enrollment period for beneficiaries. Some of them could be being eligible for both Medicare and Medicaid, qualifying for the Extra Help Pharmaceutical prescription drug coverage, qualifying for a Special Needs Plan and choosing that coverage instead, and the list goes on.

Regardless of the specifics of the beneficiary’s circumstances, a qualifying life event that results in a special enrollment period is an opportunity to get better, more comprehensive and appropriate care.

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