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Friday, Mar 27, 2015

Preventing part D penalties

BY BETSY VIPOND Hernando Today columnist

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Many people are frightened by the thought of getting a "lifetime" penalty because they failed to properly document the drug coverage they had for the years they worked beyond age 65. But those who take some simple steps to be prepared will not have to worry.

Think of it this way, the government did not make any provision for drug coverage until 2006 when the new Part D drug plans became available. In order to make the program work it was important that everyone participate--not just those who were taking medications--otherwise the plan would not be successful as insurance. No one could force people to get on the drug plan but they could provide a penalty as a stimulus to get greater participation. Also, people eligible to be on Medicare had to be on a qualifying group plan that had drug coverage at least as good as Medicare's or go out an purchase a Part D plan to solve this problem.

People working under an employer plan receive what is called a "Creditable Coverage Notice" that is delivered from the employer's health plan every year before the Medicare annual open enrollment begins. It is important if you can save that notice every year you work beyond age 65 as proof you had coverage that was "creditable" meaning as good as the Medicare Part D coverage. When you decide to leave your group insurance coverage and go on to Medicare you will already have the forms in hand and there is no question regarding your coverage status.

Now the question is what to do if you did not save the forms, and you need them for each year you worked beyond age 65, often times you can call your Part D carrier and give a voice recorded verbal attestation that you did not have Part D when you turned age 65 because you were on a group plan with creditable coverage. It is best to do this right when you go on to Medicare to avoid this issue popping up months later when you have left your employer and have less access to any supporting documentation.

If you are contacted by Maxiumus which is Medicare's arm for evaluating the penalty assessment, the important thing to remember is you need to have documentation for every year past age 65 not just for the last year you worked at your employer.

Betsy Vipond is CEO of The Senior Health Advisor and has been in insurance for over 33 years. She is a board member of Tampa Bay Health Underwriters part of the National Association of Health Underwriters and specializes in Medicare products. You may contact her at (800) 603-0901.

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