COBRA, which stands for the Consolidated Omnibus Budget Reconciliation Act, was passed into law in 1985. COBRA allows consumers to continue their enrollment in employer health insurance after becoming ineligible for coverage. Most individuals qualify for COBRA coverage for 18 months, but sometimes it can last as long as 36 months. For the most part, COBRA is a blessing for those who need to continue their employer coverage. Due to an odd regulation, COBRA beneficiaries may experience a Part B penalty if they miss their initial Medicare eligibility period.
Active employees who qualify for employer coverage should wait to enroll in Part B if they are Medicare eligible. These employees will become eligible for Part B once they no longer qualify for the employer plan. Medicare beneficiaries have up to 8 months after employment ends to enroll in Part B. Medicare Nevada eligible consumers should enroll in Part B proactively to avoid a potential Part B penalty.
Part B Penalty & Other Consequences
A common misconception is that COBRA continuation will delay the Part B eligibility period. Unfortunately, COBRA does not constitute as Qualified Coverage with Medicare enrollments. If a consumer misses their initial Part B enrollment period, they will not be able to enroll in Part B until the next General Enrollment Period. The General Enrollment Period starts in January and ends in March for a Part B effective date of July 1st. Furthermore, the beneficiary will incur a lifetime Part B penalty for enrolling late. There is a 10% Part B penalty added to the standard monthly premium for every 12 months of delayed enrollment.
Medicare beneficiaries may also miss their Medigap Open Enrollment Period if they delay their Part B enrollment. Medigap coverage, also known as Medicare Supplement Reno plans, helps pay the out-of-pocket expenses under Original Medicare. During the Medigap Open Enrollment period, a consumer’s enrollment cannot be denied based on preexisting conditions. Missing this Medicare Supplement Open Enrollment Period could potentially prevent a Medicare beneficiary from getting a Medigap plan if they have preexisting conditions. Regardless, Medicare Advantage Reno plans are always available during the Annual Enrollment Period. Medicare Advantage plans do not ask health questions.
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