What’s the Initial Enrollment Period for Medicare?
Your Initial Enrollment Period (IEP) is your 7-month window to sign up for Medicare when you turn 65. It starts:
- 3 months before your birthday month
- Includes your birthday month
- Ends 3 months after your birthday month
Example: If your birthday is in July, your IEP runs from April 1 to October 31.
Why It’s a Big Deal
Missing your IEP could mean late enrollment penalties or gaps in coverage—unless you qualify for a Special Enrollment Period (SEP) (more on that below). Enrolling on time keeps your healthcare costs predictable and your coverage seamless.
Still Working and Covered by Employer Insurance? Here’s What You Need to Know
If you’re still working at 65 and have health insurance through an employer with 20 or more employees, you can delay enrolling in Medicare Part B without a penalty. You can also delay purchase of a Part D Prescription Drug plan without a penalty, but only if your employer plan includes creditable drug coverage, meaning it’s at least as good as Medicare’s standard drug plan.
Here’s how it breaks down:
Employer has 20+ employees:
- You can delay enrolling in Part B and Part D
- You’ll qualify for a Special Enrollment Period (SEP) later—no penalties
Still contributing to an HSA?
- You can only keep contributing if you delay all parts of Medicare, including Part A
- Once you enroll in any part of Medicare, HSA contributions must stop immediately
- Talk to your tax advisor to avoid surprise penalties
How to Avoid the Part D Penalty:
✅ Make sure your employer plan includes creditable drug coverage
✅ Request a “Creditable Coverage Letter” from your employer each year and keep it on file
✅ Do not go more than 63 days without creditable drug coverage after losing employer insurance
✅ Enroll in a Medicare Part D plan during your Special Enrollment Period when you retire or lose coverage
If you miss these steps, Medicare may charge a lifetime penalty of 1% of the national base premium for every month you went without creditable drug coverage. That penalty gets added to your monthly Part D premium permanently.
When to Enroll If You’re Delaying Medicare
When you retire or lose your group health plan, you’ll have an 8-month Special Enrollment Period (SEP) to enroll in Medicare Part B penalty-free. But this SEP doesn’t cover drug coverage (Part D), so don’t delay that part too long! Reach out to our office or a qualified Medicare Agent to help with this.
💡 Pro Tip: To avoid any lapse in coverage, start planning before you leave your employer plan.