Avoid Medicare Part B Penalties

Estimate costs, check timing, and see if you qualify for a Special Enrollment Period.

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What is the Part B late-enrollment penalty?

When Medicare Part B penalties apply and when they don’t

Part B penalties apply if you skip enrollment during your Initial Enrollment Period (around age 65) and you don’t have a qualifying reason to delay. The most common reason is active employer group coverage from your own or your spouse’s current job at a company with 20+ employees. If that applies, you can delay Part B and later use a Special Enrollment Period to sign up penalty-free after the job or coverage ends.

Without a qualifying reason, you typically wait for the General Enrollment Period (Jan 1–Mar 31) and may face a surcharge once Part B begins. For Medicare’s official overview, see how to avoid penalties on Medicare.gov.

How the Part B penalty is calculated

Medicare Part B penalties and SEPs—simple math you can use

• Amount: 10% of the standard Part B premium for each full 12-month period you could have had Part B but didn’t sign up.
• Duration: The surcharge generally lasts as long as you have Part B.
• Start date: If you enroll during the General Enrollment Period, coverage usually starts the following month; your penalty starts when Part B begins.

Example: You turned 65 in June 2022, had no employer coverage, and enrolled in February 2025. That’s two full 12-month periods late → a 20% penalty added to the standard premium every month going forward.

Medicare Part B SEPs: who qualifies

Special Enrollment Periods for workers and spouses

You qualify for a Part B SEP if you or your spouse had active employment-based group coverage after turning 65. The SEP lasts at least 8 months from the earlier of (1) when employment ends or (2) when employer coverage ends. Enroll during this window to avoid the penalty.

Important: COBRA and retiree coverage don’t count as active employment for Part B SEPs. Marketplace plans also don’t create a Part B SEP. If those are your only coverages after 65, you should enroll in Part B during your IEP or GEP.

Employer coverage and creditable rules

Medicare Part B penalties and SEPs with job-based plans

Large employer plans (20+ employees) are typically creditable for delaying Part B. If your employer has fewer than 20 employees, Medicare is often primary—so you usually should take Part A and Part B at 65 to avoid claim denials and penalties. When unsure, confirm with HR in writing.

If you’re weighing options, start with our Medicare cost calculator and review our Medicare services overview. For coordination with Social Security timing, see how Medicare and Social Security work.

Key timelines, forms, and documentation

Using the Part B SEP without delays or denials

To activate the Part B SEP, Social Security typically requests two forms:

• CMS-40B: Application for Enrollment in Medicare Part B.
• CMS-L564: Request for Employment Information (completed by your employer to certify coverage).

Ask HR for the employment verification a few weeks before filing. If you’re coordinating retirement and Part B start dates, our team can help sequence everything to avoid gaps and penalties—begin on our Medicare services overview or schedule below.

Realistic examples by situation

Medicare Part B penalties and SEPs in practice

• Working past 65 at a large employer: Keep employer coverage, delay Part B, retire at 67, and enroll during the 8-month SEP—no penalty.
• COBRA after retirement: You leave work at 65, take COBRA, and delay Part B. COBRA is not active employment; enroll in Part B immediately to avoid penalties.
• Small employer coverage: Your company has 15 employees. Medicare is primary at 65, so delaying Part B can cause claim denials and penalties—enroll during your IEP.
• Delaying for an HSA: If you plan to keep contributing to an HSA, coordinate carefully—Part A can start retroactively (up to six months) when you file for Social Security, which can affect HSA eligibility. Map timing before you retire.

Taxes, IRMAA, and timing choices

Coordinating premiums, income brackets, and surcharges

Part B premiums can be higher for high-income households due to IRMAA (Income-Related Monthly Adjustment Amount). If you’re near a bracket threshold, timing your retirement income, Roth conversions, or deferred compensation may reduce future surcharges. Smart timing won’t remove a late-enrollment penalty, but it can lower overall costs.

For a broader plan, compare options with our Medicare cost calculator and then book a review with the scheduling tool below.

Common mistakes to avoid

Prevent permanent Medicare Part B surcharges

• Assuming COBRA or retiree coverage creates a SEP—it doesn’t for Part B.
• Counting Marketplace plans as creditable—they aren’t for Part B SEPs.
• Missing the 8-month SEP after employment ends—file promptly with both forms.
• Not confirming employer size and primary payer rules—small employers often require Part B at 65.
• Waiting until claims are denied—set your enrollment timing before you retire.

Get help with Medicare Part B penalties and SEPs

Talk with a licensed advisor—free and friendly

We’ll confirm whether you qualify for a Special Enrollment Period, estimate any potential penalties, and map the best Part B start date. You can also compare plan costs and request hands-on help choosing coverage.

• Run numbers with our Medicare cost calculator
• Explore next steps on our Medicare services overview
• Reach our team via our dedicated contact page

Authoritative resource: See Medicare’s guidance on penalties at Medicare.gov.

Schedule a Medicare timing review

Confirm SEP eligibility, estimate premium surcharges, and pick the best Part B start date.

Prefer a call? Speak with our Medicare team at 800-533-5969.