If you’re planning to work past 65, or plan to remain on your spouse’s employer plan, you may be considering whether or not you should still enroll in Medicare. You will still have an Initial Enrollment Period when you turn 65, but depending on the health coverage you currently have, you may also be able to delay enrollment.
Many people turning 65 who have employer coverage through an employer or spouse often choose to still enroll in Medicare Part A at 65 as it’s usually premium-free, so we won’t focus on that in this blog. It is important to note, however, that enrolling in Part A impacts your health savings account (HSA) if you have one. Watch the video below to learn how Medicare and HSAs work.
What happens to your Health Savings Account (HSA) with Medicare
Part B is different. Unlike Part A, Medicare Part B has a monthly premium, which can cost $164.90 to $560.50 depending on income. It has a late enrollment penalty for anybody who enrolls without qualifying for a Special Enrollment Period. That penalty is an additional 10 percent of the Part B premium for each 12-month period you delay enrollment. Learn more about this and other late enrollment penalties.
Now, let’s look more closely at enrolling in Medicare Part B when working past 65.
When you must enroll in Medicare Part B
You may be required to get Medicare Part B even when you’re still working. There are two situations in which you must get Part B when you turn 65.
If your employer has fewer than 20 employees.
If you’re covered by a spouse’s employer, and the employer requires covered dependents to enroll in Medicare when they turn 65.
If you’re not married but living in a domestic partnership and are covered by your partner’s employer health insurance.
In each of the above cases, you won’t qualify for a Special Enrollment Period and cannot delay enrolling without incurring late enrollment penalties.
Additionally, some employer plans will automatically become secondary to Medicare when you become eligible. In this case, Medicare becomes your primary insurance and would pay first. If you do not have Medicare and need health care, you would essentially have almost no coverage from your employer plan. One such plan that operates like this is the military’s TriCare for Life.
When you should consider enrolling in Medicare Part B
If you qualify to delay enrolling in Medicare, deciding to do so is a personal choice.
Some may choose to delay, and for others, it may still be a good fit for your health and lifestyle to enroll in Part B. Consider the following when trying to decide whether to enroll in Part B or delay while still working:
Is Medicare less expensive than your current health insurance?
Does Medicare offer better coverage than your current health insurance?
Do you want to keep your current insurance but also take advantage of Medicare benefits
Do you want to enroll in either a Medigap or Medicare Advantage plan?
Is your prescription drug coverage considered “creditable” by Medicare?
Answering the above questions can help you decide whether or not to delay enrollment. It’s important to carefully consider the last item regarding prescription drug coverage. While most employer coverage is considered creditable, you should still verify if it is or could end up facing a late enrollment penalty for Medicare Part D.
I want to delay Part B
If you qualify and decide you want to delay enrolling in Medicare Part B, you should not face any late enrollment penalties for Part B. When you lose your employer coverage, you will get an 8-month Special Enrollment Period during which to enroll in Medicare Part B, and Part A if you haven’t done so already.
You’ll also be able to enroll in a Medicare Advantage (Part C) plan or Part D prescription drug plan in the first two months of this period. Note: if you enroll in Part C or Part D after the first two months of your Special Enrollment Period, you may face late enrollment penalties for Part D. You’ll want to also ensure you provide proof of creditable coverage when you enroll in Part D.
You do not need to notify Medicare that you will be delaying Part B unless you are already receiving Social Security or Railroad Retirement Board benefits.
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