You are not entitled to this SEP (and must therefore enroll in Part B during your initial enrollment period to avoid a late penalty) in certain situations — for example, if you work beyond age 65 for an employer that has fewer than 20 employees; have health insurance under the military's TriCare health system; or have been working outside the United States for an employer that does not provide American-style group health insurance.
Special enrollment period (SEP) for Part D
Part D drug coverage has different rules than Part B. You can delay enrolling in Part D beyond age 65 provided that you continue to have "creditable" drug coverage — meaning that Medicare considers it of at least equal value to Part D. When this coverage ends, you will be entitled to this SEP and can sign up immediately and without penalty in the following circumstances:
- When drug benefits from your current employer (or from your spouse's employer) terminate on retirement or through no fault of your own.
- When COBRA coverage terminates.
- When you lose drug benefits from a retiree health plan through no fault of your own.
- When you return from abroad to live permanently in the United States.
- When you are released from prison.
In all these cases, the special enrollment period lasts for 63 days beyond the crucial date — such as the end of drug coverage, your return to the United States or your release from prison. But your actual coverage in a Part D drug plan must have begun on or before the 63rd day to avoid a late penalty. Since coverage cannot begin until the first of the month after enrollment, it's best to sign up no later than the end of the second calendar month after the critical date.
If you let this SEP expire before enrolling in a Part D drug plan, you must wait until the next annual enrollment period (see below), and you will receive a late penalty — added permanently to your plan's premiums — for every month of delay.
Annual open enrollment period: Oct. 15 through Dec. 7
Note that in 2010 and previous years this annual open enrollment period ran from Nov. 15 to Dec. 31. But the new time frame that starts in 2011 is still the important period when you can switch from one plan to another or, in some circumstances, join a plan for the first time. Use this period to:
- Switch from one "stand-alone" Part D drug plan to another.
- Switch from one Medicare Advantage plan to another.
- Change from traditional Medicare to a Medicare Advantage plan.
- Change from a Medicare Advantage plan to traditional Medicare.
- Enroll in a stand-alone Part D drug plan if you change from a Medicare Advantage plan to traditional Medicare.
- Enroll in a stand-alone Part D drug plan for the first time if you voluntarily opted out of other drug coverage, such as coverage provided by a current or former employer.
In all cases, your new coverage begins Jan. 1. If you're switching drug plans or Medicare Advantage plans, you do not need to actively "disenroll" from the one you are leaving — the act of enrolling in a new plan automatically cancels coverage under the old one. Similarly, if you're in a Medicare Advantage plan but enroll in a stand-alone drug plan during open enrollment, this automatically cancels the old plan and also switches you to the traditional Medicare program for your medical benefits.
General annual open enrollment for Medicare: Jan. 1 through March 31
This period is specifically for people who missed signing up for Medicare Part B at the required time — either during their initial enrollment period or during a special enrollment period for Part B. If you need to sign up for Part B during this period, be aware that your coverage will not begin until July 1, and you may be required to pay a late penalty based on how many years you have delayed. (See: "When Does the Part B Late Penalty Clock Start Ticking?")
Annual "disenrollment" period: Jan. 1 through Feb. 14
This period is specifically for people enrolled in a Medicare Advantage health plan who want to change to traditional Medicare. It doesn't matter how long you've been in the Medicare Advantage plan. Even if you've just signed up with a plan (during a recent annual open enrollment) and your coverage began only on Jan. 1, you can still use this period to change your mind and switch to the traditional Medicare program. You also can enroll in a stand-alone Part D prescription drug plan at this time. In both cases, your new coverage begins the first day of the month after you make the change.
Note that this is a new period starting in 2011, and replaces the one in which people were allowed to change from one program to the other, or to switch from one Medicare Advantage plan to another, between Jan. 1 and March 31. You can no longer use this time frame to change plans, but must use the annual open enrollment period that runs from Oct. 15 to Dec. 7 (see above).
Other special enrollment periods (SEPs) for Medicare Advantage and stand-alone drug plans
There are a number of other SEPs available in specific circumstances:
- If this is your first year ever in a Medicare Advantage plan, it counts as a trial period. You can change to traditional Medicare at any time within these 12 months. And you have a guaranteed right to buy medigap supplemental insurance within 63 days of your plan coverage ending.
- If you are receiving Extra Help to pay for your prescription drugs, you can change your drug plan at any time. Coverage in the new plan begins the month after you enroll in it.
- If you live in a nursing home, you can change your drug plan the month you move into the home and any month while you're living there. You also get a two-month SEP to switch to another plan after you move out.
- If you move out of your plan's service area, you have the right to change to a new plan in your new area. (But if you're in a drug plan that serves an entire state, and you move within that state, your coverage will continue and you won't be entitled to an SEP.)
- If your plan withdraws from your service area, leaves Medicare or is closed down, you will receive a letter explaining how long your coverage will last and when you can switch to a different plan of your choice.
- If you were tricked or misled into joining a Medicare Advantage plan, you can ask Medicare to investigate and grant you a SEP to change to another plan.
- If your plan breaks its contract with you — for example, by denying promised benefits — you can ask Medicare to investigate and grant you a SEP to change to another plan.
Patricia Barry is a senior editor with the AARP Bulletin.