Are you 65 or older, still working, and wondering what to do about Medicare? You’re not alone.
Medicare eligibility begins at age 65, or earlier if you qualify due to disability. Full retirement age for Social Security benefits used to be 65, however that has changed. According to the Social Security Administration, beginning with people born in 1938, full retirement age gradually increases until it reaches 67 for people born after 1959. That means there are a lot of employed 65 year olds out there that have other health insurance coverage and are wondering what to do about Medicare.
If you are working and covered by an employer sponsored health plan, it is probably best to stay in your current plan in addition to enrolling in Medicare. Before making any decisions, check with your benefits administrator to see how Original Medicare (Parts A and B) would work with your current plan.
Medicare and Other Insurance
It is very important to understand how Medicare works with other health insurance plans. For example, you need to know which plan pays the bills first. Part B may be of limited value when you have other health insurance because the other insurance would pay first. It may be better to delay enrolling in Part B and avoid paying the premium. However, people who are self-employed or who work for an employer with less than 20 full-time employees might want to enroll in Part B. In these cases, health expenses would be paid first by Part B. Always check with your plan administrator before making a decision.
Start with Basic Coverage
Many people who work past age 65 enroll only in Medicare Part A (hospital coverage) because most don’t have to pay a monthly premium. Some choose to enroll in both Parts A and B. However, Part B (doctor and outpatient coverage) comes with a monthly premium based on income. In 2017, the premium amount starts at $134.00 per month.
Many people don’t enroll in Part B until they lose their current employer-sponsored coverage. Enrollment in Part B can be done during a Special Enrollment Period without penalty. You have eight months after employment ends to sign up for Part B without penalty. This does not mean after COBRA ends. This means after your actual job ends. For most people it is best to have your Part B begin immediately after your employer sponsored coverage ends. This will give you the most options in when choosing what plan to get after your employer sponsored coverage ends, for example a Medicare Supplement or Medicare Advantage plan (both require you are enrolled in both Medicare Parts A and B).
Is Enrollment Required?
Before you do anything about Medicare, talk to your employer’s health plan administrator for answers to the following questions:
• Am I required to enroll in Medicare Part A or Part B?
• What kind of health plan do I have?
• How would my health insurance change if I enrolled in Medicare?
Thinking About Retirement?
If retirement is on the horizon, there are a few things you need to consider.
• Keep your health insurance coverage records so you can prove that you had coverage past your Initial Enrollment Period for Medicare.
• If you are retiring, you have 63 days after your employer-sponsored coverage ends to join a Medicare plan with Part D drug coverage without penalty. But it’s best to sign up before you retire to avoid a gap in coverage.
• Talk to your benefits administrator to see if you and/or your dependents can get retiree benefits from your employer.
• If you can’t get retiree coverage from your employer, you may want to sign up for both Medicare Parts A and B.
• Check to see if your dependents are eligible for COBRA.
It’s important to know when you are eligible to enroll in Medicare. If you miss your window of opportunity, you may have to pay a penalty or have fewer choices.