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65 and Still Working? What You Need to Know about Medicare

As more Americans continue working past the traditional retirement age of 65, it’s not surprising that people are confused about their Medicare options. Do I have to enroll? When do I enroll? Who do I notify of my choices?

You’re eligible to receive full Medicare benefits when you turn 65. Whether or not you choose to sign up for Parts A, B, C, and D may depend on what type of health coverage you have through your employer and how long you think you’d like to continue working.

65 and still working

It’s a lot of complex information to sort out, and if you don’t act at the right times, you could end up paying more.

Here’s what you need to know:

  1. Sign up or make sure you’re already signed up for premium-free Part A.
  2. Your employer can’t drop your health coverage just because you turn 65 (unless you work for a very small company. See more details below.)
  3. Decide if you need Medicare Parts B and D.
  4. If you decide not to enroll in Parts B and D, let Medicare know you have “credible coverage.”

If you’re not working full time, you must sign up for Parts A, B, and D during the initial enrollment period or pay a penalty. COBRA and retiree coverage don’t count as “credible coverage.”

Here are some of the most common questions people ask us about what to do about Medicare while you’re still working.

Q: Do I have to enroll if I’m already receiving Social Security?
A: No, you’ll be automatically enrolled in Part A (hospital insurance) if you’re already receiving Social Security. You have to enroll separately for Parts B and D, which each have a separate premium.

Q: I’m almost 65 and am not receiving Social Security, how do I enroll in Medicare?
A: If you’re not already receiving Social Security, you have to enroll on your own. You can enroll in Medicare Part A online or call 800-772-1213 during the 7-month initial enrollment period which includes the 3 months before, the month of, and the 3 months after you turn 65.

If you miss this window, you may pay higher premiums for life. If you want coverage to start on the first day of the month you turn 65, make sure you enroll during the 3 month window before your birthday. If you wait to enroll 2 months before your birthday, coverage will not start until the month after your birthday and coverage will be delayed one month for each month you delay signing up.

Q: What if I get health insurance through my employer?
A: There are a few things to think about here:

  1. Even though you have health insurance through your employer, you’re still eligible for full Medicare benefits once you turn 65.
  2. You should sign up for Medicare Part A because it’s free to those who have worked and contributed to social Security for at least 10 years.
  3. If you’re still working and have coverage through your employer, your employer can’t deny you coverage simply because you turned 65. * See exception below.
  4. If you have “credible coverage” through your employer, you don’t have to sign up for Medicare Part B and D right away. not sure what credible coverage is, talk with your Human Resources department. If you choose not to, make sure you notify Medicare and let them know about your credible coverage.

* Companies with fewer than 20 employees can opt out as your primary payer, meaning they’re your primary insurance coverage. Otherwise, your company must continue to offer you your same coverage.

Q: If I sign up for Part A, do I have to sign up for Parts B and D?
A: That’s up to you, but considers this…
Since you’re 65, you’re eligible for Medicare Parts B (medical/doctor insurance) and D (prescription coverage) in addition to Part A. You could choose to enroll in Parts B and D, but you’ll pay a premium for that additional coverage.

Even if you work for a large employer, you can choose to make Medicare your secondary payer (or backup provider) and use Part D to help pay for prescriptions.

Important Note: If you decide Part A and your employer-sponsored coverage are adequate for you, make sure you still notify Medicare that you have “credible coverage.” If you don’t let them know, there will be a financial penalty when you do end up needing Medicare.

Q: What if I have COBRA or retiree coverage?
A: COBRA and retiree coverage are not considering “still working” and thus do not exempt you from enrolling in Parts B and D during the initial Medicare enrollment period. “Where we see people really get messed up is with COBRA or retiree coverage. Those are the areas where the rules are crystal clear. You have to enroll in Part B.  In the initial enrollment period or your special enrollment period 8 months after you lose that coverage.” says Joe Baker of the Medicare Rights Center.

In Summary…
Here are the key points you need to think about as you turn 65 and are still working.

  1. Sign up or make sure you’re already signed up for premium-free Part A.
  2. Make a decision about whether or not you need parts B and D in addition to your employer-sponsored coverage.
  3. If you decide not to enroll in Parts B and D, let Medicare know you have “credible coverage.”
  4. If you’re not working full time, you must sign up for Parts A, B, and D during the initial enrollment period or pay a penalty. COBRA and retiree coverage do not count as “credible coverage.”

Questions?
We’d love to hear from you. What challenges are you facing? Maybe you’re going through this yourself or helping a spouse or parent. Share your story in

Comments

  1. Jane Cng | 18 February 2014 at 9:06 pm

    So how do I “notify” Social Security that I have creditable coverage? Please don’t leave out important information.

  2. Sandy | 9 July 2014 at 3:03 pm

    My husband, who turns 65 in Oct., is a cardiologist, has no intention of retiring or collecting Soc. Sec. till age 72, and is the primary owner (with another physician) of his medical practice–which is a “small employer” (under 20 on payroll). His practice provides group coverage via United PPO. He was told yesterday by the practice’s insurance agent that he HAD to apply for Medicare NOW “to avoid a gap in coverage.” But he wants to keep his group coverage until I turn 65 (I’m 63) and can go on Medicare myself. As HE is the “company,” he doesn’t HAVE to opt out of keeping him (and me) on the group policy until the last day of his IEP (plus the period between then and Medicare kicking in), and in fact doesn’t want to opt out. But he misunderstood the agent as saying he would lose his group policy at 65, and so applied yesterday (online) for Medicare Part A & B. Can he retract his application for Medicare and reapply just before the end of his IEP? That way, his Medicare would start in April and I would have to buy an expensive indiv. plan for myself for only 9 rather than 15 months before my 65th birthday. Is there any way to go about retracting the application other than going down to a SSA office in person? Every hour lost from his practice costs at least $1000 in fees he can’t collect (and meet his overhead).

    • HooPayz | 17 July 2014 at 12:56 pm

      Hi Sandy,

      Thank you for your question.

      With regard to Medicare Part A hospital insurance, most people don’t have a premium to pay, so there is no reason not to enroll when you turn 65. So there is no reason to retract Part A. You can stay on his private insurance through his company. So the real question is whether or not to pay for Part B now and/or should you keep your company policy in place?

      If you keep your private insurance in place because you are a business owner and still working, there is no penalty for signing up for Part B later.
      If you keep Part B now, Medicare will become primary (because your company has less than 20 employees) but you can still have a policy through your company. The employer sponsored insurance will be secondary to Medicare, meaning they pick up your costs after Medicare has paid.

      Whether it’s to your husband’s advantage to enroll in Medicare Part B medical insurance or in a Medicare Part D prescription drug plan while he is still working full-time depends on the type of coverage you’re currently receiving through your company.

      Each month, the premium for Medicare Part B is around $96.40. If you regularly have more than that per month in healthcare costs that your employer-sponsored insurance doesn’t cover, signing up for Part B might be a good idea.

      You should go through the same process when deciding about Medicare Part D prescription drug plan. Medicare Part D plans cost anywhere from a few dollars a month up to $100 per month, with the average coming in at around $25. If your current employer-based insurance doesn’t cover prescription drugs at all, then enrolling in a Medicare Part D plan probably makes good sense if you have regular prescription drug costs of more than $25 per month. If your current insurance plan does cover drugs, signing up also for a Medicare Part D plan probably makes sense only if your current insurance still leaves you with more than $25 a month in unpaid drug copayments or other costs.

      Please check Medicare.gov’s eligibility tool[medicare.gov] for more information or changes to policy regulations.

  3. Seamus McWilliams | 30 October 2014 at 4:12 pm

    Hi, I am signed up for medicare ( I’m 65) both A & B. I will not be retiring until July 1 2015. My question is will there be a problem since I am covered by my current employer (over 20 employees). Thank you in advance for our answer.

    Seamus

    • HooPayz | 3 November 2014 at 4:11 pm

      Hi Seamus,
      Thank you for your question. Your enrollment with Medicare will not be a problem, even with your employer-sponsored health coverage. Until your retirement, your employer-sponsored health insurance will be automatically used as your primary payer and Medicare will act as your secondary payer. This means that when you receive medical care, your employer-sponsored health benefits will be applied first. Then your Medicare benefits will be applied.

      Since your employer-sponsored insurance will be your primary payer, be sure to default to their requirements. That means when looking for providers and receiving medical care, you’ll need to find in-network providers who also accept Medicare. This way you’ll be utilizing all your benefits.

      There is an exception to this is you have an HSA. HSAs are not compatible with Medicare. If you have an HSA, you’ll need to speak to an HR representative and let them know you’ve already enrolled in Medicare. They’ll be able to give you some more information on how best to move forward.

      • Seamus McWilliams | 10 November 2014 at 3:52 pm

        Thank You very much for your response. I sincerely appreciate your help.

        Seamus

  4. SJ | 10 February 2015 at 5:34 pm

    I signed up for Part A of Medicare when I turned 65. I continued working and had credible coverage, including drugs through my employer. I set my retirement date for February 1, 2015 and applied, through Humana and a broker, to have a supplemental plan, Humana Gold Plus, that includes drug coverage. Somehow the broker and Humana made a mistake and signed me up for drug coverage only commencing on January 1, 2015. I have contacted Medicare, Humana and Social Security as I am continuously receiving a bill for IRMMA Part D for the month of January despite the fact I had full coverage through my employer until midnight of January 31, 2015. I am not disputing the surcharge going forward in February, but I am disputing having to pay for the month of January. I have spent hours on the telephone and cannot get this resolved. Now Medicare is telling me I should have been paying the surcharge since the day I turned 65, August of 2014. This makes no sense to me. I am frustrated as I don’t know how to resolve this? Any ideas?

    • hoopayz | 20 February 2015 at 1:54 pm

      Hi SJ. Thank you for your question.

      It sounds like you signed up for Medicare Part D during open enrollment. Open enrollment started on Oct. 15th and continued through Dec. 7th, 2014. By law, coverage starts on Jan. 1st of the following year, in this case Jan. 1, 2015. To sign up outside of the annual open enrollment period, you must meet the criteria for a SEP – special enrollment period. You would need a Notice of Creditable Coverage from your employer to sign up at the time your employer coverage ended.

      Our advice is to keep your Part D coverage and pay the 1 month extra premium. You could try to disenroll based on your special circumstance and then re-enroll starting coverage on Feb. 1st (you have 68 days to get coverage following a change in circumstance such as the loss of employer insurance). But I have no confidence that won’t be messy. And yes, your broker should have been clear that your coverage was starting Jan. 1st.

      Equally important is Part B Medicare coverage. Part B covers outpatient and physician services. Open enrollment is right now – Jan. 1st through March 31st. You will need to apply now or have no coverage for the rest of the year (the 68 day special enrollment period would apply to your Part B but that will end on April 8th anyway). You can use the link below to apply for Part B coverage.

      Once you have Part A (hospitals), Part B (outpatient & physicians) and Part D (prescriptions), you are responsible for the 20% coinsurance. To cover your coinsurance, you can buy a Medigap or Medicare supplemental insurance plan. Since you have Part D you will not be able to purchase a supplement with drug coverage but that’s okay since you already have coverage.

      Hope this helps!

      http://www.medicare.gov/sign-up-change-plans/

  5. Kathryn | 3 July 2015 at 9:44 am

    I turned 65 in June 2015. I will continue to work until I am 66, full retirement age. I have an HSA with my employer. Can I delay signing up for Medicare Part A until 3 months after my birthday (enrollment period is 3 months before and 3 months after my 65 birthday, right?) I want to continue contributing to my HSA account through automatic deductions from my pay check.

    • hoopayz | 16 July 2015 at 12:22 pm

      Hi Kathryn, Thank you for your question. Yes, you’re able to enroll up to three months after your 65th birthday. This will delay the start of your coverage, but you’ll still be within your enrollment period.

      It’s in your best interest to speak to an HR representative about your HSA contributions. In many cases, a HSA is not compatible with Medicare coverage. Depending on the terms your employer has set up for your HSA use, your employer might stop contributing funds to your HSA account.

  6. Joe Infantino | 19 October 2015 at 10:31 am

    I am still working full time and am approaching age 65. I plan to continue working until I am age 66 in 2017. I am a State of Florida employee with excellent family coverage, (my wife is one year junior and thus why I want to wait until she is 65) in 2017. Do I still have to sign up for Medicare during my enrollment period, is there any penalty if I wait to enroll when I am 66 ?
    Can your reply to the above e-mail please.

    • hoopayz | 5 November 2015 at 2:01 pm

      Hi Joe, Thank you for your question. Your employment and resulting group coverage means that you will qualify for a Special Enrollment period. After your employment and it’s benefits end, you will have 8 months to sign up for Medicare Parts A & B. Typically, those who qualify for Special Enrollment are not charged a late enrollment penalty.
      For more information, you can discuss the specifics with your HR representative or visit Medicare.gov.

  7. Margaret Smith | 27 November 2015 at 1:54 pm

    Hello,
    My husband will turn 65 in February 2016 and will continue to work for a year or two. We understand that he will need to enroll in Medicare A although he has very good health insurance for the both of us. Can you give me advice on what happens to me as (I am a housewife and am 7 years younger than my spouse) I have always been insured through his medical insurance once he retires? Thanks in advance.

    • hoopayz | 5 January 2016 at 8:55 am

      Hello Margaret,
      Thank you for your question. Your husband’s retirement benefit should be outlined in his summary plan description. Retiree coverage can vary widely, depending on the specific health plan. Look into the details of your husband’s retiree coverage. Some employees cap the amount that retiree coverage will pay out. In other cases, retiree coverage may become inactive when its beneficiary becomes eligible for Medicare. Your husband can refer to his benefits summary or speak to an HR representative for more details.

      Please note: there’s no family coverage under Medicare. If your husband’s employer-sponsored health insurance does not continue to cover you, you will need to secure your own health insurance elsewhere.

  8. Doug Pridgen | 4 December 2015 at 3:51 pm

    My mother is 68 and still working full time. Her employer provides health insurance through work, but the plan stinks and it costs a lot. Can she drop it and enroll in a Medicare Supplement plan?

    • hoopayz | 5 January 2016 at 8:49 am

      Hi Doug,

      Thank you for your question. Based on her age, your mother is eligible to elect Medicare coverage in lieu of her employer-sponsored health insurance. Or she can choose to keep her current health insurance plan and supplement her coverage with Medicare. Medicare coverage is broken into four parts:

      Part A: Hospital coverage. For inpatient care.

      Part B: Medical insurance. For outpatient/physician care.

      Part C: Medicare Advantage. Purchased through a private insurance company to help pay for their healthcare costs. This is in place of parts A and B.

      Part D: Medicare prescription drug coverage.

      Keep in mind though: if your mother drops her current coverage for Medicare, she might not be able to re-enroll at a later date. To fully explore her options, she can speak to her HR representative or visit Medicare.gov.

  9. Sheryl Treadwell | 19 March 2016 at 2:04 pm

    My husband and I are both 68. We have great Health Care coverage through His employer (much cheaper than Medicare). I am a housewife covered by my husband’s insurance. Our accountant told us that I should apply now to receive my part of my husband’s social security and my husband should apply for deferred ss benefits. If we do that and enroll in Medicare Part A only, will there be any unexpected consequences? When he does retire, will there be penalites for not signing up for full Medicare benefits now?

    • hoopayz | 24 April 2016 at 12:49 pm

      Hi Sheryl, Thank you for your question. Yes, you’re right – there is a penalty for not signing up during a designated enrollment period (the time frame typically corresponds to your 65th birthday.) However, due to your husband’s employment status, you may both be eligible for a Special Enrollment Period. To learn more about the sign up process, check Medicare.gov.

      It is in your best interest for your husband to further discuss the details of his health plan with his HR department. While Medicare Part A (hospital insurance) is free for most beneficiaries, the distribution of medical benefits under your current health plan may change with your Medicare enrollment. This depends on the specifics of your healthcare coverage.

  10. Anne C Lippard | 9 May 2016 at 2:50 pm

    I work for a company of 67 employees. I work FULL TIME. Im 70 years old . Medicare should be secondary.. Is that correct ?? ( Im in NC )

    • hoopayz | 25 May 2016 at 9:57 am

      Hi Anne, Thank you for your question. Yes, until your retirement, your employer-sponsored health insurance should default to your primary payer, with your Medicare coverage supplementing as your secondary payer.

      Please keep in mind, that means your employer-sponsored health benefits will be applied to your medical bills first so be sure to adhere to your health plan’s requirements (ie, stay in-network with providers who also accept Medicare, request necessary pre-authorizations, etc.)

      There is an exception if you have an HSA. Speak to an HR representative if you are enrolled in Medicare with an HSA.

      Hope this helps!

  11. Vickie Andrie | 13 May 2016 at 4:58 am

    I am on SS and on Medicare . I also work better than 50 hrs. a week. Now my employer says I have to cut my hrs back to 40 hrs because of Obamacare. I already have Medicare and refused my employer insurance so why can’t I stay with my current schedule?

    • Brittney | 17 October 2016 at 12:50 pm

      Hello Vickie, Thank you for your question. Since you are at 40 hours, you are still considered a full-time employee, so the decrease in hours should not be due to or affect your health benefits. However, new legislation in some states now requires employees to be paid overtime for more than 40 hours worked per week. We recommend clarifying with your employer. Your HR representative can provide more information.

  12. C. | 18 August 2016 at 9:03 am

    My husband owns a small company with two employees, one recently turned 65. Husband has always paid for health & dental ins.. When employee turned 65 she applied for Medicare and because she’s always been a good employee, my husband offered to pay her Medicare premiums beyond Part A *FOR her*. She was very picky about the other parts because she requires specific asthma medication coverage, etc. and the RX plan she wanted cost more. My husband agreed to this and he’s been paying these premiums for her. My husband consulted with his health ins. rep in organizing all this who told him it’s highly unusual for an employer to pay Medicare premiums. Nice, but not required. He knew this, but wanted to do it for the employee. He allowed her to pick whatever she wanted through Medicare, SHE was the one who pursued all this when she knew she was nearing 65 and the enrollment period would be ending.

    Yesterday employee stated she never “opted” (using that word) to go off the usual company health ins. plan and now thinks because the company is a corporation, that ALL employees are supposed to be offered the same plan or be in violation of corporate law.

    We’re a bit confused…..was there a specific OPT form that was supposed to be signed by WHICH party???

    • Brittney | 17 October 2016 at 1:07 pm

      Hello and thank you for your question. As a small employer with 2 employees, the “play or pay” mandate does not apply to your husband’s company so he is not required to offer insurance at all. However, the precedent he sets with one employee must be followed with the other. So the rules he chooses to establish (via what he offers) is important and must be consistent. At this juncture, we suggest your husband reach back out to his broker for consultation to standardize his insurance offerings.

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