РусскийIf you recently enrolled into a prescription drug plan or Medicare Advantage plan and received a Late Enrollment penalty declaration, do not panic, let’s see what it is about and if you’re the one who will have to pay it.
What is LEP for Part D?
- LEP is a penalty you might have to pay if you don’t sign up for a Medicare Part D prescription drug plan when you’re first eligible and you don’t have other prescription drug coverage (like from an employer). It can be a stand alone drug plan or drug coverage included into Medicare Advantage plan.
Why Do You Get LEP?
- You get LEP because Medicare wants you to have prescription drug coverage when you’re initially eligible for it: when you got part A, or part A and B or just part B.. If you wait to sign up longer than 63 days and don’t have other creditable coverage, you’ll have to pay a penalty.It will be added to the cost of your current Medicare drug plan. It is calculated based on the amount of months you haven’t been covered by a drug plan, but already had Medicare..
Filling Out LEP Declaration:
- If you had a gap in drug coverage and signed up for a plan, the insurance company will send a LEP Declaration. You don’t need to fill it out if you did not have creditable coverage for prescriptions since you got on Medicare. Most of the time creditable coverage comes from the employer group plan which covers more than 20 people. The penalty will be added automatically to your Part D plan premium. Medicare informs your drug plan about the gap, charge LEP from your drug plan and the drug plan pays it to medicare. So, do not blame your insurance company, these rules are created by the government.
- If you had creditable coverage, then you need to fill out the LEP Declaration you got from your prescription drug or Medicare Advantage plan. Your current insurance plan must be informed of the name of the employer and the group plan that you had. Just follow the instructions, fill it out and send it to the address provided. If you missed the form or it got lost in transit and you have already been awarded LEP, you can call the plan and verbally provide the required information within 60 days.
How is LEP Calculated?
- LEP is calculated based on two things:
- The number of months you went without Part D or other creditable prescription drug coverage after your first opportunity to enroll.
- A percentage of the average Part D plan premium (set by Medicare each year).
Example of LEP Calculation:
- Let’s say you waited 12 months after your first chance to enroll in Part D.
- In 2024, the penalty is about 1% of the average Part D premium, which is roughly $35.
- Calculation: 12 months x 1% x $35 = $4.20.
Avoiding LEP:
- To avoid LEP, sign up for a Part D plan during your Initial Enrollment Period when you first become eligible for Medicare. If you have other credible prescription drug coverage, you won’t incur a penalty.
In short, the Late Enrollment Penalty for Medicare Part D is a fee you pay if you delay signing up for a Part D plan when you’re eligible and don’t have other drug coverage. It’s calculated based on how long you waited and a percentage of the average Part D premium for the year. To avoid the penalty, enroll in Part D during your Initial Enrollment Period.
To learn more about part D check out our article:
If you want to learn more about this topic form official sources, please check out an article on a government Medicare portal here: