Chapter 4: Things to Watch Out For
Let's talk about the penalties associated with Medicare.
You will not be penalized if you have creditable employer coverage(if your company has more than 20 employees) even if you turn 65 and don't sign up for Medicare. This means you are allowed to delay both parts A & B and remain on your creditable employer coverage.
You will only be penalized if you don't have creditable coverage when you turn 65 and don't sign up for Medicare. You will be charged a 10% penalty for every year you went without coverage on top of your regular part B premium. It is a permanent penalty.
You can also be penalized for not signing up for a Part D plan(prescription coverage). Typically 1% per month or 12% per year.
COBRA is NOT considered creditable by Medicare, so if you qualify for Medicare, you will still need to sign up for A and B if electing COBRA. Medicare will be primary, and COBRA will be secondary insurance. If you elect COBRA without part B while being eligible for Medicare, COBRA can deny 80% of your outpatient medical claims that would have otherwise been covered by part B.