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One of the most common sources of member complaints—and even disenrollments—comes from confusion around the Medicare Part D Late Enrollment Penalty (LEP). As agents, it’s our job to explain this clearly up front so clients know what to expect and how to avoid unnecessary costs.
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Why This Matters for Agents
According to recent data, nearly 80% of members who filed a sales-related complaint ended up leaving their plan. Many of these complaints were tied to confusion about the LEP. That means setting the right expectations not only helps your clients but also improves your retention and protects your business.
What Is the Part D Late Enrollment Penalty?
The LEP applies when a Medicare beneficiary goes without Part D or other creditable prescription drug coverage for 63 or more continuous days after their Initial Enrollment Period.
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The penalty is added to their monthly Part D premium for as long as they have Medicare drug coverage.
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The amount is calculated by Medicare, not the plan. It is typically 1% of the national base premium for each full, uncovered month.
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Beneficiaries receiving Low Income Subsidy (LIS)/Extra Help are not subject to the penalty.
How Agents Can Address the LEP
With New Members
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Ask about prior coverage: “Did you have prescription drug coverage through an employer, VA, or another source?”
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If yes: remind them they’ll get an attestation form within about 7 days of enrollment that must be completed and returned within 30 days.
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If no: explain that a gap in coverage can result in a penalty.
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Ask if they’re already paying an LEP: Let them know the penalty follows them, even if they switch plans.
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Ask about Extra Help: If they qualify, the LEP is waived. Encourage clients to apply—it can save them significant money.
With Existing Members
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Reinforce the importance of avoiding a 63-day gap in prescription drug coverage.
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Remind them to check each year if their current coverage is still considered “creditable.”
Key Conversation Tips for Agents
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Bring it up early – The needs assessment is the perfect time.
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Frame it as a safeguard – Let clients know you’re helping them avoid surprises.
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Encourage LIS applications – Even if they didn’t qualify in the past, financial situations change.
Bottom Line
Talking about the Late Enrollment Penalty may not be the flashiest part of your sales process, but it’s one of the most important. A clear explanation can prevent complaints, improve retention, and position you as a trusted advisor.
Take the time to walk clients through their options, ask the right questions, and provide the resources they need. It’s a simple step that pays off for both you and your clients.