As the American workforce ages, many are still working past the age of 65. Since 65 is the age you become eligible for Medicare benefits, this can lead to some confusion. Knowing the musts, dos, and don’ts of Medicare can help you (1) avoid penalties and (2) make the most of your benefits.
We’ve updated our popular blog “Over 65 and Still Working” with the latest information and some of our most frequently asked questions to help you navigate your Medicare options while still employed.
First, let’s start with an overview. Medicare is a Federal health insurance program available to Americans 65 and older (and a few other eligible groups) and offers hospital, physician, and prescription coverage. Coverage is broken into “parts”:
- Medicare Part A– Hospital coverage. Learn more about Medicare Part A.
- Medicare Part B– Outpatient services and physicians. Learn more about Medicare Part B.
- Medicare Part C– Medicare Advantage. Managed network coverage. Learn more about Medicare Part C.
- Medicare Part D– Medicare Prescription Drug coverage. Learn more about Medicare Part D.
With a few exceptions, you are eligible to sign up 3 months prior to and up to 3 months after your 65th birthday. Determine your eligibility by answering a few quick questions on Medicare.gov.
For a growing number of American workers, their 65th birthday doesn’t mean retirement. If you’re over 65 and still working, you probably have some questions about what that means for your Medicare benefits. Check out our answers below!
Question: I have health insurance through my employer. Do I have to enroll in Medicare? Maybe.
Depending on the size of your employer and the type of health plan they provide, you might be able to delay enrolling in Medicare Part A.
- To determine if you’re eligible to delay coverage without penalty, Medicare.gov offers some detailed information.
- But remember! Part A is free to eligible recipients and for large employers, can usually be used as secondary insurance (meaning it may pick up costs that your primary insurance doesn’t).
Question: If I sign up for Part A, do I have to sign up for Parts B and D too?
No, but it may be in your best interest. You can always decline Parts B and D, but that means you’ll face a penalty if you enroll at a later date. Note: if you have “credible coverage” through your employer, you can delay your enrollment in Part B and D without being penalized. “Credible coverage” means your company’s medical insurance can be used in lieu of Part B (outpatient and physician coverage) and D (prescription coverage). To determine if your insurance meets the criteria, reach out to your HR department.
- Remember, if your employer-sponsored coverage allows you to delay Part B, you MUST notify Medicare. If you don’t let them know, you’ll face a financial penalty when you eventually do enroll in Part B.
- COBRA and retiree coverage do not qualify as “credible coverage.”
Question: Can my employer deny me coverage when I turn 65?
Not unless you work with a small employer that has fewer than 20 employees. In this case, they may require you sign up for Parts A & B, so the company’s health plan can act as your secondary insurance.
Question: I have an HSA. Will it be affected by my Medicare enrollment?
Probably. Speak to an HR representative before you enroll in Medicare. In some cases, employers will stop contributing funds to your HSA account once you enroll in Medicare. If so, it may be in your best interest to delay your enrollment.
Question: What about my spouse who is turning 65? Are they still covered on my employer-sponsored health plan?
The same applies to your spouse – it depends on the size of your employer and the type of health plan they provide.
- If it’s a small employer (less than 20 employees), your spouse, just like you, should sign up for Parts A and B when you’re first eligible (3 months prior to and up to 3 months after your 65th)
- Remember, Medicare does not cover younger spouses. If you do elect to enroll, that does not qualify your husband or wife for the same benefits. Unless they’ve been granted an exception, they will only become eligible for Medicare at age 65.
Question: If Parts B and D are optional based on my employer-sponsored health insurance, is there a benefit to enrolling now?
It depends on your needs! While you’ll pay premiums for Parts B and D, they can provide additional coverage to your current insurance. Based on your medical and prescription needs, this might be a good financial decision.
- You can choose to make Medicare Part B your secondary payer and use Part D to help pay for prescriptions if you work for a large employer (over 20 employees.)
Question: What are the penalties for missing Part B enrollment?
Your monthly premium for Part B may cost 10% more for the duration of your Medicare use! And that’s 10% more each 12-months you were eligible but didn’t enroll in Part B. Additionally, you’ll be unable to sign up for Part B until the General Enrollment Period reopens (January 1 – March 31 every year), meaning you could face coverage gaps.
- Plan ahead to avoid any possible penalties!
Question: I am preparing to retire after initially delaying Medicare Part B. How do I enroll?
- Remember, even if you decide to extend your insurance through COBRA, you’ll need to enroll in Medicare. Don’t delay!
Have other questions? Comment below!