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For most people, turning age 65 means becoming eligible for Medicare.
If you have no health insurance currently, this is a fairly simple process.
If however you are still working and have health insurance from your employer, you may be wondering what options you have.
Part A of Medicare if Still Working?
The first thing to remember is that for most people, Part A of Medicare (hospitalization) is paid for 100%. Part A is free if you have worked 40 quarters or ten years. If you already receive Part A for free, there is no reason to delay Part A unless you currently have an HSA account through work.
Part B is a separate decision. In most cases, as long as you have group health insurance provided by a large employer for whom you are still working, you can delay enrolling in Part B. Part B covers outpatient services and doctor visits, but requires its own monthly premium. If you delay Part B while you are still working and covered under your employer health plan, you save money. When you eventually retire or leave work, you’ll be entitled to a special enrollment period of eight months to sign up for Part B without incurring a late penalty.
You can delay Part B only if your employment is “current”. This means that if you are offered retiree health benefits or COBRA after leaving your job, you still need to enroll in Medicare Part B and A within the 8 months following your employment ending. If you are covered under your spouse’s plan through their employer where they actively work, you are still fine to delay Part B until they retire or end employment.
If the company you work for has fewer than 20 employees, your employer may require you to sign up for Part B when you turn 65. If this is the case, Medicare would become your primary coverage (meaning it would pay bills first) and your employer coverage would be secondary. In this case, it is best to speak with Human Resources or call your health insurance company to find out exactly how your plan works with Medicare.
If you decide to delay Part B and you already receive Social Security retirement benefits, you will need to opt out. If you currently receive Social Security benefits, you will receive a letter that contains your Medicare card within the few months before your 65th birthday. To opt out, follow the instructions included in that letter within the timeframe it specifies.
Part D of Medicare if Still Working?
Part D of Medicare covers prescription drugs. As long as your employer plan offers a prescription drug benefit that is “creditable”, meaning that Medicare considers it at least equal value to Part D coverage, you wouldn’t need to enroll in Part D. In this case you would be entitled to a two-month special enrollment period to sign up with a Part D plan without penalty, after your employment or plan ceases. Your employer plan can tell you whether it is creditable or not. If not, you need to enroll in a Part D plan during your initial enrollment period at age 65. If you do not, you will have a late penalty when you DO eventually sign up.