Medicare Part D is prescription drug coverage and is essential for anyone enrolled in Medicare. Understanding when to enroll in Medicare Part D is extremely important for both beneficiaries and agents. Medicare beneficiaries not enrolled on time will be without coverage resulting in a life-long penalty.
Initial Enrollment Period (IEP)
The IEP ( Initial Enrollment Period) is the first opportunity beneficiaries have to enroll in a Medicare plan. If the beneficiary enrolls in Medicare at this time, they should make sure to include Part D coverage. During the IEP, beneficiaries can choose either a stand alone Part D plan or a Medicare Advantage Plan with drug coverage MAPD plan.
The IEP is a 7 month window when a beneficiary turning 65 can enroll in Medicare. It starts three months before the beneficiary’s 65th birthday month and ends three months after their 65th birthday month.
Those eligible for Medicare due to a disability have an IEP. The IEP starts three months before their eligibility date and ends three months after the 25th month of receiving disability benefits.
Annual Enrollment Period (AEP)
The Annual Enrollment Period (AEP), also called Open Enrollment, takes place from October 15 until December 7 each year. During this time, beneficiaries can enroll in a Part D (PDP) plan if they did not enroll during their IEP. For those already enrolled in a PDP plan, this is an opportunity to look at current coverage and change to a plan that provides better coverage. Plan enrollees can switch from one Part D plan to another or enroll in an MAPD plan.
Please note: changes made during AEP take effect on January 1st of the following year.
Special Enrollment Periods (SEPs)
SEPs provide an opportunity to make changes to Medicare coverage. This includes Medicare Part D outside the standard enrollment periods when the following circumstances occur:
- They move their place of residence and it is outside the service area of their current plan. When this happens, the enrollee is eligible for an SEP.
- If the beneficiary is eligible for Extra Help, they can change their Part D coverage once during each of the first 3 quarters of the calendar year.
- When there is loss of creditable prescription coverage (not due to non-payment), they have 63 days to enroll in a new PDP plan. Most commonly, this happens when a beneficiary comes off employer sponsored coverage.
- In the event a plan leaves the current service area, beneficiaries have 63 days to move to a new PDP plan.
Medicare Advantage Open Enrollment Period (MA OEP)
This enrollment period is only available to those currently enrolled in a Medicare Advantage plan. It runs from Jan 1 through March 31 each year. During this time, plan enrollees have an opportunity to change their current MA/MAPD plan. The MA OEP allows beneficiaries to change from one Medicare Advantage plan to another Medicare Advantage plan either with or without Part D coverage. They can also disenroll from a Medicare Advantage plan and go back to Original Medicare with the option to enroll in a stand alone Part D plan and a Medicare Supplement.
Watch a quick YouTube video on OEP best practices
Important: beneficiaries must have a guaranteed issue election or pass underwriting to enroll in a Medicare Supplement plan.
Late Enrollment Penalty (LEP)
Those who enroll in Part D coverage when first eligible can avoid late enrollment penalties. The LEP applies to Medicare beneficiaries who go without creditable prescription drug coverage for a period of 63 consecutive days or more once their IEP ends.
CMS calculates the penalty based on how long the beneficiary went without coverage. Once they have that figure, they add it to the monthly Part D premiums for life. This applies even when the enrollee has a $0 MAPD plan. Although those who receive Extra Help do not have to pay the penalty.
It is important to understand Medicare Part D enrollment periods and rules to avoid penalties and ensure beneficiaries have the coverage they need.
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