My wife began receiving SSA Disability benefits in December 2013 at age 55 and is a dependent on my health insurance. I retired in June 2010 and failed to realize that my health insurance provider required my wife to enroll in Medicare Part B. She enrolled in Medicare Part B in 2015 and is charged a 10% late enrollment penalty. I understand that the Disability benefits automatically convert to Retirement benefits at her full retirement age. Does this mean the the late enrollment penalty will end? Can she terminate her Disability benefits just before FRA in order to qualify for a new Initial Enrollment Period?

Hi. Actually, your wife's late enrollment penalty will end when she reaches age 65, even though her Social Security disability (SSDI) benefits won't convert to regular Social Security retirement benefits until she reaches her full retirement age (FRA). Everyone who meets the requirements for Medicare receives a new Initial Enrollment Period (IEP) starting 3 months prior to the month they reach age 65, even if they are already eligible for Medicare based on entitlement to SSDI (https://secure.ssa.gov/apps10/poms.nsf/lnx/0600805015).

Regarding your last question, as explained above there would be no need for your wife to terminate her SSDI benefits in order to qualify for a new IEP at age 65. But, the answer is no, your wife could not voluntarily terminate her SSDI entitlement for any reason. The only way to voluntarily end entitlement to SSDI is to withdraw your application, which would require you to repay all benefits that have been paid based on that application, including reimbursing any Medicare claims that have been paid.

Best, Jerry