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Example |
Mrs. Martinez has Medicare, and her first chance to get Medicare drug coverage (during her Initial Enrollment Period) ended on July 31, 2018. She doesn’t have prescription drug coverage from any other source. She didn’t join a Medicare drug plan by July 31, 2018, and instead joined during the Open Enrollment Period that ended December 7, 2020. Her Medicare drug coverage started January 1, 2021. Since Mrs. Martinez was without creditable prescription drug coverage from August 2018–December 2020, her penalty in 2021 is 29% (1% for each of the 29 months) of $33.37 (the national base beneficiary premium) or $9.68 each month. Since the monthly penalty is always rounded to the nearest $0.10, she will pay $9.70 each month in addition to her plan’s monthly premium. Here's the math: .29 (29% penalty) × $33.37 (base beneficiary premium) = $9.68 $9.68 rounded to the nearest $0.10 = $9.70 $9.70 = Mrs. Martinez's monthly late enrollment penalty for 2021 |
How do I know if I owe a penalty?
What if I don't agree with the late enrollment penalty?
You may be able to ask for a "reconsideration." Your drug plan will send information about how to request a reconsideration.
Complete the form, and return it to the address or fax number listed on the form. You must do this within 60 days from the date on the letter telling you that you owe a late enrollment penalty. Also send any proof that supports your case, like a copy of your notice of creditable prescription drug coverage from an employer or union plan.
Do I have to pay the penalty even if I don't agree with it?
Related Resources
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