1. WHEN SHOULD THEY APPLY?
Most advisors know that Medicare eligibility begins when a person turns 65 or has a qualifying disability. But not everyone understands when to begin the application process. And because some of your clients may apply for Part A and B at different times, it is important to understand when clients should apply for each.
For most clients, think in terms of the seven-month enrollment period for Part A: It includes the three months prior to a client's 65th birthday, as well as that month and the three months after. One exception: Clients who are already receiving Social Security will be automatically enrolled.
Use your CRM system to help clients. Set up alerts to remind you when clients are approaching age 65 and then reach out to help them start the process. Remind clients that if they miss their initial enrollment period, their application may have to wait until the general enrollment period, which occurs each year between January 1 and March 31. That delay could cause a gap in coverage, since they will have to wait until July 1 for coverage to start.
2. DO CLIENTS NEED PART B?
My clients often ask if they should sign up for Part B at the same time as Part A. Naturally, they are concerned about paying premiums for Part B if they don't need the coverage. But the timing for enrolling in Part B is a bit trickier and the stakes much higher, since late enrollment can cause a permanent premium increase.
One thing clients should consider: If they don't have employer group coverage, then this is a no-brainer. They should apply during their seven-month initial enrollment period.
If your clients are covered under a group health plan based on current employment -- whether their own employer or a spouse's -- they may qualify for a special enrollment period, often abbreviated as SEP. If so, they may delay enrolling in Part B until their group health coverage is terminated, and avoid the late enrollment penalty.
The eight-month special period starts the month after the end of either employment or the group health insurance coverage based on that employment -- whichever happens first. Here, again, you can use your CRM system to remind you when to revisit a client's Part B coverage.
Keep in mind that COBRA coverage does not qualify as employer coverage, and so won't allow them to escape the penalty for delayed enrollment. Be sure to educate your clients so they don't make this common mistake.
There are other considerations as well. Some smaller employers require Part B coverage to be integrated with their existing insurance plans, for instance, while larger employers may not. Have your clients talk to their human resources department or insurance specialist to know whether Part B coverage is necessary for them.
3. MEDIGAP OR ADVANTAGE PLAN?
Do your clients understand the difference between a Medigap policy and an Advantage plan? Most don't, so this is a great opportunity to educate them on the basics and provide resources to get them to the right coverage.
- Medicare supplemental insurance policies, also known as Medigap policies, provide additional benefits and can reduce out-of-pocket costs when combined with parts A and B. They're provided by private insurance companies and require additional premium payments. And because they usually exclude prescription drug coverage, clients may need to layer Part D coverage on top. That means clients could end up with three different monthly insurance premiums to pay and coverage plans to manage. There's a vast marketplace for these types of policies, though, so you should be able to help them target and virtually customize coverage for a client's exact situation.
- Advantage plans, on the other hand, combine Medicare parts A, B and sometimes D. In essence, these policies bundle coverage into a single Medicare-approved health plan offered by a private insurance company. The level of coverage varies depending on the plan chosen; again, there are numerous options available.