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Are your LEOFF I’s on Medicare?

January is the perfect time to double check your LEOFF I Retirees to make sure those that are eligible for Medicare have enrolled on both Medicare A & B. Ensuring the eligible LEOFF I’s have enrolled can save the city significant premium costs. And if they’ve missed their initial Medicare enrollment window, it can cost even more in penalties.

LEOFF I Medicare Status Check

This January, make sure that any LEOFF I who is eligible for Medicare has signed up for both Medicare A and B.

Medicare Eligibility Dates

Medicare eligibility usually starts the first of the month in which a person turns 65. The only exception to this is for those who have a birthday on the first day of the month. For those individuals, Medicare eligibility starts the first of the preceding month (March 1 birthday generates a February 1 effective date).

For those on a Social Security Disability, eligibility for Medicare starts 24 months after their established disability date.

Medicare Part A AND Medicare Part B are Important

Medicare Part A is free and starts automatically; Medicare Part B is about $100 per month and must be elected by the retiree.

Premium Savings – LEOFF I on Medicare A & B

Once your LEOFF I Retiree is covered on Medicare Parts A and B, there are significant premium savings for the city. Here is a breakdown of the 2015 monthly rates:

Regence

Plan A – Retiree not on Medicare: $1,651.63
Plan A – Retiree on Medicare A&B: $1,052.97
MedAdvantage Plan (must be on Medicare A&B): $515.33

GroupHealth

Retiree not on Medicare: $1,610.28
Retiree on Medicare A&B (MedAdvantage plan): $397.60

Initial Medicare Enrollment Window Penalties

The reason that you need to check on your retirees now, is that if they missed their initial Medicare Enrollment window for Part B, there is an opening the first of every year (January 1 – March 31) to get them enrolled. Individuals added during this window will have Medicare Part B coverage effective the following July 1.

Those signing up late are subject to a penalty of up to 10% of the current premium for each 12 months that they are late signing up. This is a permanent penalty. If they are 24 months late, it would be a 20% penalty; 30 months would also be a 20% penalty, but 36 months would be a 30% penalty. (We have recently found LEOFF I retirees that have been on Medicare Plan A for over 5 years and now are in the process of getting enrolled in Part B. The 50% to 70% penalties involved are significant.)

LEOFF I Law and Medicare Costs and Penalties

The LEOFF I law indicates that, at their own expense, a LEOFF I must sign up for Medicare A&B when they become eligible. Different LEOFF Boards handle the reimbursement of premiums differently. Some require the city to reimburse premiums and others do not. You may need to review this issue with your local Board to see how they handle it. However, even if they require reimbursement of the premium, it is reasonable to require the LEOFF I pay the monthly late enrollment penalty since he did not sign up for the coverage in a timely manner.

If the LEOFF I misses the current late enrollment window, they cannot sign up until January of 2016. This would make their Part B coverage (and associated reduction in premium for the city) effective July 1, 2016.

Call Trust Staff with Questions!

We know this can be confusing. If you need assistance determining a LEOFF I Retiree’s Medicare status, or have other questions, contact Trust Staff at 800-562-8981 or BenefitInfo@awcnet.org

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