In an ideal world, you would only own health insurance when you need it. Forego health insurance all those years in which you were healthy and never visited a doctor. Those years in which you constantly seemed to have something go wrong, and the medical bills were adding up. Buy the best insurance policy you can find. Not surprising, insurance companies also know this, and Medicare is designed to prevent this. This is the reason that you are penalized for starting Medicare past age-65. Medicare doesn’t want you to wait until you are “unhealthy”, before starting health insurance. However, this form can make sure that you don’t pay a penalty when starting Medicare past age-65.
The Medicare Penalty
Medicare consists of two parts; part A and B. Medicare part A, which covers hospital coverage, has no monthly premium. Medicare part B, doctor coverage, has a $135.50 monthly premium in 2019. However, if you don’t start Medicare when you become eligible, age 65, you will pay a penalty and have a higher premium on part B coverage. This penalty will increase your monthly premium cost, for the rest of your life. Your monthly premium for Part B may go up 10% for each full 12-month period that you could have had Part B, but didn’t sign up for it.
For example, if you were eligible for part B when you turned 65, but never signed up until age 66, your monthly premiums would shoot up to $149.05. Wait two-years and you are stuck with a 20% penalty, or $162.60 per month for the rest of your life.
So, does this mean that you need to start Medicare even if you have coverage through an employer at age 65? No, but this is why you need to file a form to avoid paying the penalty. Enter Medicare Form CMS-L564.
Request for employment information
One of the exceptions to the annual 10% Medicare part-B premium penalty is having coverage through an employer past age 65. In other words, if you have employer provided health insurance, you don’t need to turn on Medicare at age 65. In fact many times it is a negative to turn on Medicare at age 65, if you are covered by an employer plan. Medicare Form CMS-L564 is proof from your employer that you were covered by a group health insurance plan past age-65.
The form is pretty straightforward. The person applying for Medicare past age 65 will need to complete the form, but so will your employer. Try to get the form completed when you leave your employer, so that they can complete the section about when you are retiring and losing group health coverage. Once both you, and your employer, have signed the form, you will send it back to social security with your part B application.
If you are covered by group health insurance past age 65, you will likely delay Medicare until retirement. Unfortunately, without proof from your employer, you could face penalties when you turn on Medicare part B. Medicare Form CMS-L564 is proof from you and your employer that you were covered by group health insurance after age 65. Without form CMS-L564 form, you could be facing a Medicare penalty for the rest of your life.