Part B Late Enrollment Penalty Clock

The Part B Late Enrollment Penalty. It’s important to know when your personal clock “starts ticking” and counting the number of months that you didn’t have Part B when you should have. Social Security officials explain that the penalty clock starts ticking at the beginning of the month after your 7-month Initial Enrollment Period (IEP) expires, and shuts off on the final day (March 31) of the annual General Enrollment Period (GEP) in which you sign up for Part B. (Medicare doesn’t impose a penalty until you have gone 12 full months without Part B coverage. The penalty is 10% for “every full 12 months” of no coverage. Examples: 10 months would be no penalty, 13 months would be 10% penalty, 25 months would be 20% penalty, 36 months would be 30% penalty, etc.

Example 1:
Birthday May 15
IEP period: February 1 – August 31st (7-month period)
You fail to enroll in Part B by the end of your IEP (August 31st)
The next time you can sign up is during the next GEP (January 1 – March 31st)
You sign up in February (of the first available GEP).
The penalty clock started ticking from September 1 through March 31 = 7 months, which mean NO penalty.
NOTE: The effective date of Part B coverage is not until July 1st, however, effective date is not relevant when calculating late enrollment penalty. The ticking penalty clock starts the month after your IEP ends and doesn’t stop until the end of the GEP you sign up during.

Example 2:
65th Birthday: December 15 (2020)
IEP period: September 1 – March 31 (7-month period)
You fail to enroll in Part B by the end of your IEP (March 31, 2021)
The next time you can sign up is during GEP of the NEXT year (2022) because you just missed GEP in 2021.
You sign up in January 2022 (the next available GEP).
The penalty clock started ticking from April 1 (2021) all the way through March 31 (2022) = 12 months, which mean 10% Part B penalty for life. *NOTE: By finally getting enrolled by January 2021 makes the enrollment delay only 10 months (in the above example), but under Social Security rules, the clock continues to tick until the last day of the GEP (March 31), in which you enroll – that is what pushed this penalty to reach a full 12 months.

Once you’ve missed your first deadline to enroll in Part B, you can only enroll during the next General Enrollment Period (GEP), which runs from January 1 to March 31 each year. Coverage would begin on the 1st of the month after you enroll. 

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