Working Past Age 65?
Even if you are still working and covered by your employer plan, you are first eligible for Medicare during what’s called your Initial Enrollment Period (IEP). The IEP begins 3 months before the month of your 65th birthday and ends 3 months after the month of your 65th birthday. During this 7-month period, you can choose to sign up for Medicare Part A (hospital insurance), Part B (medical insurance), and Medicare Part D (Medicare prescription drug coverage). You can also choose to delay your enrollment in any part of Medicare, but that depends on a few things–the size of your employer, whether your employer coverage is considered credible by Medicare, and whether you want to continue to contribute to a Health Savings Account (HSA).
You may qualify for premium-free Medicare Part A if you or your spouse worked and paid Medicare taxes for at least 10 years and earned 40 credits or qualified quarters. If you qualify for premium-free Part A, in some cases, it’s a good idea to enroll in Medicare when you turn 65 even if you delay your Part B enrollment while you work. It can supplement your employer’s inpatient hospital coverage, and you won’t pay an additional monthly premium. Once you lose your employer coverage, you can sign up for Part B during your 8-month Special Enrollment Period (SEP).
However, if you are Medicare-eligible and your employer has less than 20 employees, Medicare becomes the primary payer, and your employer plan is secondary. Therefore, you should sign up for Medicare when you’re first eligible during your 7-month Initial Enrollment Period.
If you chose to delay your enrollment in a Medicare Part D Prescription Drug plan and your employer plan’s prescription drug coverage is not considered credible coverage according to Medicare, you may have to pay a late enrollment penalty (LEP) once you sign up for Medicare Part D. You should get a letter each year from your employer plan letting you know if your prescription drug plan is considered creditable by Medicare.
Can I have both employer coverage and Medicare?
The short answer is yes. However, in many cases, it’s unnecessary to have both Medicare Part B and credible coverage through your large group employer. If you are Medicare-eligible and have credible coverage from your employer, there are a few things to think about before enrolling in Medicare Part A, B, C, or D while covered by your employer pla. It’s important to do your research and reach out to a Medicare Specialist or your benefits advisor to determine if it’s necessary to have both Medicare and coverage through your employer. For example, you will pay a monthly premium for Medicare Part B (outpatient medical insurance) based on your income. Therefore, it may not be necessary to pay a monthly premium for both Medicare Part B and maintain your employer coverage.
Once you’re Medicare-eligible, you can elect to drop your employer plan and sign up for Original Medicare Part A and B through the federal government, and then choose to add a Medicare Advantage or Medicare Supplement plan, as your primary insurance. However, it’s important to consider what’s more cost-effective–to stay with your employer plan, drop your employer coverage, or keep your employer coverage and sign up for Medicare Part A and/or Part B. Our Medicare Specialist can help you decide what makes the most sense for you based on your situation.
If you choose to drop your employer You can make the decision to stay with that plan or elect to enroll in another of the Medicare Advantage plans on the market since one Medicare Advantage Plan may not provide the coverage you need compared to another. You can also opt to switch to Original Medicare if a Medicare Advantage Plan does not fit your needs.
What happens if I retire and then go back to work?
Should you retire and get Medicare Part B, then go back into the workforce and receive insurance through your employer, you may cancel Part B at that time. When you retire again, you will have a second 6-month Medicare Open Enrollment period to choose your Medicare coverage.
What if I have a Health Savings Account?
Finally, if you have a Health Savings Account and would like to continue to contribute to your HSA after you become Medicare-eligible, you should not sign up for any part of the federal Medicare program to avoid tax penalties.
Talk to our Brooks, Todd & McNeil Medicare Specialist
Knowing which plan options are best can be confusing as you enter your Medicare eligible years, especially if you are still working. Our Brooks, Todd & McNeil Medicare Specialists can help determine which Medicare health plans are best for you both now and as your needs evolve over the years. Call our Medicare Division at 860-379-2885 or email ann@bowenagencyllc.com for more information or to schedule a time to review your options before the Medicare open enrollment period.