If you or your spouse plan to work past 65, enrolling in Medicare gets complicated. But once you take time to understand the Medicare options for your work situation, you’ll be able to make a personalized plan for your Medicare enrollment.
Keep in mind, you’ll want to have that plan in place before your initial enrollment period. It begins three months before your 65th birthday month and lasts for seven months. If you’re not prepared, you could be hit with Medicare penalties for late enrollment.
The following advice will help you make sense of working past 65 and Medicare:
If you have health insurance through your job or your spouse’s job, the size of the employer is the first step in determining whether or not to enroll in Medicare when you turn 65.
Your company has fewer than 20 employees. With a smaller company, your employer can require you to enroll in Medicare. In that case, Medicare becomes your primary insurer and the employer plan provides secondary coverage. Your best plan is to join Medicare during the initial enrollment period.
Your company employs more than 20 people. With larger companies, you have more options. You can decline your employer coverage and simply use Medicare. You can talk to your employer about how Medicare and the company’s health plan work together. As a third option, you can accept the employer health plan and delay enrollment in Medicare Parts A and/or B.
Before deciding to delay Medicare Parts A and B, check with your benefits manager to ensure that you have group health plan coverage (as defined by the IRS). If your employer-sponsored coverage comes from retiree benefits or COBRA, you cannot delay Medicare enrollment without penalty.
To put off joining Medicare Part D, you need prescription drug coverage through your employer or the Veteran’s Administration. Check with your insurance company to make sure your prescription drug company is “creditable” (equal to or better than what Medicare is offering). Without creditable drug coverage, you’ll be at risk for a penalty when you eventually join Part D.
Enrolling in Medicare Part A (alongside your employer health coverage) only makes sense if you qualify for premium-free Medicare Part A. You qualify if you’ve worked for 10 years or more and paid your Medicare tax during that time.
However, there is one reason to consider delaying premium-free Medicare Part A. If you have a Health Savings Account (HSA), joining Medicare Part A will affect that account. Once you enroll in Part A, you can no longer contribute to your HSA. Your employer may also stop contributing to your HSA. Speak with your company’s human resources department to see how enrolling Medicare Part A will change your benefits.
If you receive coverage through your employer’s group health plan, you likely don’t need the coverage (or added cost) of Medicare Part B. You can delay Medicare Part B with no penalty, but you may need to be proactive.
If you get benefits through Social Security or the Railroad Retirement Board (RRB) before the age of 65, you will be automatically enrolled in Parts A and B. If you don’t want Part B, follow the instructions on your red, white, and blue Medicare card. If you keep the card, you will keep Part B and pay Part B premiums.
If you don’t receive Social Security or RRB benefits before 65, nothing needs to be done to delay Part B.
The Medicare special enrollment period (SEP) lets you delay Medicare enrollment without penalty. To qualify, you or your spouse must be actively employed at a company with more than 20 employees and participate in an IRS-approved group health plan.
Be sure to follow the SEP guidelines. You’ll need to enroll in Medicare within eight months of either the end of your employment or the end of your employer group health plan (whichever comes first). Failure to join Medicare during the SEP can result in costly penalties and a lapse in health coverage.