Penalties & IRMAA

Part B Late Enrollment Penalty

10% for each full 12 months in the period you could have had Part B but didn’t sign up. This is a lifetime penalty added to the cost of Part B. This penalty is usually waived if you use the Special Enrollment Period and submit proof of employer sponsored coverage.

Part D Late Enrollment Penalty

1% of the “national base beneficiary premium” for each month in the period you could have had Part D but didn’t sign up. This is a lifetime penalty that adjusts each year based on the updated base premium. You should get a letter from your employer sponsored plan each year informing you if your coverage is "creditable prescriptioin drug coverage". Keep this letter as proof to avoid this penalty.

Part B & Part D IRMAA

If your modified adjusted gross income is above a certain amount, you may pay an Income Related Monthly Adjustment Amount (IRMAA). This is an extra charge added to your Part B & Part D premiums. Your tax return from 2 years ago is used for IRMAA determinations. You can submit a form to request that Medicare waive IRMAA.