Chapter 6 - Late Enrollment Penalties

If you do not sign up for Part B or Part D drug coverage when you first become eligible you may have to pay late enrollment penalties. If you are penalized, the penalty will stay with you for the rest of your life. The penalty for enrolling in Part B is 10% of the premium for every 12-month period you should have had Part B and did not. If you are still employed and your employer provides group health coverage to more than 20 employees, you can turn down Part B and pick it up at a later date and there will be no Part B late enrollment penalties.

The penalty for Part D is 1% of the national monthly average premium for a Part D drug plan. This comes to approximately 35-40 cents for each month you did not have drug coverage when you should have. If you are a Veteran, and you receive your prescriptions from the VA, this Part D late enrollment penalty does not apply to you. The same is true if you have employer drug coverage or are getting “extra help” from Medicare.