When its best to sign up to Medicare if you’re still working?

As you approach the age of 65, it’s essential to understand how your Medicare enrollment works, especially if you’re still working. Navigating the complexities of Medicare while being employed can be overwhelming, but with the right information, you can make informed decisions about your healthcare coverage. In this comprehensive guide, we’ll explore the various scenarios you might encounter when deciding when to sign up for Medicare if you’re still working. From understanding Medicare eligibility requirements to exploring Medicare coverage options, we’ll provide you with the knowledge you need to make the best choices for your healthcare needs.

Do I need to sign up for Medicare when I turn 65?

One of the most common questions people have when they’re still working at the age of 65 is whether they need to sign up for Medicare. The answer depends on several factors, including the size of your employer and the type of health insurance coverage you have. Let’s explore different scenarios:

Scenario 1: Still working at a job with more than 20 employees

If you’re still employed at a job with more than 20 employees and have health insurance coverage from that job, you have some flexibility when it comes to signing up for Medicare. In this situation, you can wait until you (or your spouse) stop working, or until you lose your health insurance, to sign up for Part B (Medical Insurance). The advantage of waiting is that you won’t have to pay a late enrollment penalty. Additionally, if you don’t have to pay a premium for Part A (Hospital Insurance), you can choose to sign up when you turn 65 or anytime later.

Scenario 2: Still working at a job with fewer than 20 employees

If you’re still employed at a job with fewer than 20 employees and have health insurance coverage from that job, the rules for signing up for Medicare are similar to the previous scenario. You can wait until you (or your spouse) stop working or lose your health insurance to sign up for Part B. However, it’s crucial to ask your employer if you need to sign up for Part A and Part B when you turn 65, as your job-based insurance might not cover the costs for services you get if you don’t sign up for Medicare.

Scenario 3: Still working with health insurance not from a job

In some cases, you may still be working but have health insurance that’s not from a job, such as Medicaid or Marketplace coverage. The rules for signing up for Medicare in this scenario can vary depending on the specific type of coverage you have. It’s essential to answer a few questions to determine when to sign up and understand the implications based on your specific coverage. Additionally, it’s recommended to contact your health insurance provider to get more information on how Medicare works with your current coverage.

Scenario 4: Self-employed or have coverage not available to everyone at the company

If you’re self-employed or have health insurance that’s not available to everyone at the company, it’s crucial to determine if your coverage qualifies as employer group health plan coverage. If it doesn’t, it’s recommended to sign up for Medicare when you turn 65 to avoid a monthly Part B late enrollment penalty. Additionally, if you have retiree coverage from a previous job, it may not pay for your health services if you don’t have both Part A and Part B. It’s essential to consult with your benefits administrator to understand how your retiree coverage works with Medicare.

Scenario 5: COBRA coverage

If you have COBRA coverage, it’s essential to consider the timing of signing up for Medicare. If you haven’t signed up for Medicare yet and have COBRA coverage, it’s recommended to sign up for Medicare when you turn 65 to avoid gaps in coverage and a monthly Part B late enrollment penalty. It’s important not to wait until your COBRA coverage ends to sign up for Part B, as getting COBRA doesn’t extend your limited time to sign up for Medicare. On the other hand, if you got COBRA coverage after signing up for Medicare, COBRA pays after Medicare, unless you have End-Stage Renal Disease.

Scenario 6: Stipend from employer to buy your own health insurance

If you (or your spouse) receive a stipend from your employer to buy your own health insurance, it’s crucial to consult with your health insurance company to determine if you need to sign up for Part A and Part B when you turn 65. Some private insurance plans may have rules that lower what they pay for services if you’re eligible for other coverage like Medicare. Once you sign up for Medicare, it becomes the primary payer, and your private insurance becomes secondary.

Scenario 7: Still working without any health insurance

If you’re still working but don’t have any health insurance, it’s generally recommended to sign up for both Part A (Hospital Insurance) and Part B (Medical Insurance) when you’re first eligible, usually when you turn 65. While there are risks to signing up later, such as having to pay a penalty, there are ways to get help paying for costs if you can’t afford insurance.

How to sign up for Medicare

Once you’ve determined when you need to sign up for Medicare based on your employment and health insurance situation, it’s essential to understand the process of enrolling in Medicare. The steps you need to take may vary depending on whether you’re already receiving benefits from Social Security or the Railroad Retirement Board. Here’s a general overview of how to sign up for Medicare:

1. If You’re Already Receiving Benefits: If you’re already receiving Social Security benefits or the Railroad Retirement Board, you’ll automatically get enrolled in Medicare. You don’t need to take any additional steps. Your best option is always to talk to your benefits administrator or visit your local social security office to gather more information specific to your unique situation
2. If You’re Not Receiving Benefits: If you’re not receiving benefits, you’ll need to sign up for Medicare. You can answer a few questions to determine how you can get Medicare and access the appropriate sign-up information. It’s important to be aware of the deadlines and ensure you sign up during your Initial Enrollment Period to avoid any penalties
3. Retiring in the Next Year: If you’re planning to retire within the next year, it’s crucial to understand what steps you need to take before you retire. This includes coordinating your Health Savings Account (HSA) contributions and ensuring you have a smooth transition from your employer-sponsored health insurance to Medicare

Do I need more coverage?

After signing up for Part A and Part B of Medicare, you’ll have the option to choose additional coverage to supplement your Medicare benefits. Let’s explore the different coverage options and when you can enroll in them:

Medicare Advantage Plan

If you’re interested in getting additional coverage beyond Original Medicare, you can consider enrolling in a Medicare Advantage Plan. This type of plan, offered by private insurance companies, provides all the benefits of Medicare Part A and Part B, along with additional benefits such as prescription drug coverage and dental and vision services. You have two months after your job-based insurance ends to join a Medicare Advantage Plan.

Medicare Drug Plan

If you need prescription drug coverage, you can enroll in a Medicare Drug Plan. Similar to Medicare Advantage Plans, Medicare Drug Plans are offered by private insurance companies. You have two months after your job-based insurance ends to join a Medicare Drug Plan and ensure your coverage starts when your job-based insurance ends.

Medicare Supplement Insurance (Medigap) policy

Medicare Supplement Insurance, also known as Medigap, helps cover the out-of-pocket costs that Original Medicare doesn’t pay, such as deductibles, coinsurance, and copayments. You have six months after you first get both Part A and Part B (if you’re 65 or older) to buy a Medigap policy. It’s essential to learn more about Medigap and compare different plans to find the one that best fits your needs.

It’s important to note that if your employer offers coverage when you have Medicare, such as a supplemental plan, drug coverage, or Medicare Advantage Plan, you should inquire about the implications of joining a plan that your employer doesn’t offer. You want to ensure that you and your family won’t lose your retiree coverage if you choose to enroll in a different plan.

Additional considerations

As you navigate the Medicare enrollment process while still working, there are a few additional considerations to keep in mind:

Creditable drug coverage

If you have other creditable drug coverage, such as through your employer or union, you can delay enrollment to join a Medicare Drug Plan without facing a late enrollment penalty. It’s important to confirm with your current drug plan if it qualifies as creditable coverage or if you need to join a Medicare Drug Plan to avoid penalties.

Late enrollment penalties

To avoid late enrollment penalties, it’s crucial to sign up for Medicare during your Initial Enrollment Period or Special Enrollment Period if you qualify. Late enrollment penalties can result in higher premiums for Part B and Part D coverage, so it’s best to enroll on time.

Get help paying costs

If you can’t afford insurance or need assistance with Medicare costs, there are programs available to help. It’s important to explore options such as Medicaid, Extra Help, and Medicare Savings Programs to determine if you qualify for financial assistance.

Conclusion

Navigating the Medicare enrollment process while still working can be complex, but understanding your options and taking the necessary steps can ensure you have the coverage you need. Whether you’re working for a large employer, have retiree coverage, or are self-employed, it’s important to assess your situation and make informed decisions about when to sign up for Medicare. By considering factors such as employer size, health insurance coverage, and the availability of additional coverage options, you can navigate the Medicare landscape with confidence and secure the healthcare coverage that best suits your needs.

Sources

• When to Sign Up for Medicare If You’re 65 and Still Working – NerdWallet
• Working past 65 – Medicare