One of the most common questions asked by seniors these days is “Do I need to enroll in Medicare if I’m still working at 65?” The answer isn’t black and white. It depends on multiple factors and personal preferences. If you don’t plan on retiring at 65, you are going to want to ask yourself these questions to figure out when you should enroll in Medicare.
What is the Size of My Employer?
The first thing you need to consider when deciding to enroll in Medicare at 65 is the size of your employer. If you work for a small employer with less than 20 employees, you need to enroll in Medicare when your Initial Enrollment Period arises.
Medicare will become your primary insurance and your group plan will be secondary. Your group plan monitors your age, so there is a chance that they will stop paying your claims if they realize you are eligible for Medicare and don’t have it. You will also have late enrollment penalties later on because you missed your Initial Enrollment Period for Medicare.
If your employer has 20 or more employees, it’s considered a large employer. When working for a large employer you have three options during your Initial Enrollment Period.
- Stick with your group plan and delay enrolling in Medicare until you retire.
- Disenroll from your group plan and enroll in Medicare.
- Have both your group plan and Medicare for extra coverage.
It’s advisable to research and compare premiums costs for both your group plan and Medicare to see which option is best for you. If you choose option one, you will have a Special Enrollment Period once you retire to enroll in Medicare without penalty.
Do I Have Retiree Benefits?
Retiree benefits are health plans that some employers offer to their retirees. Medicare is the primary insurance for these types of health plans. This means you need to enroll in Medicare if you have retiree benefits.
One type of plan that retirees often ask about is COBRA. COBRA allows the retiree to have health coverage up to 18 months after their retirement. However, Medicare requires you to enroll within the first 8 months of having COBRA if you are over 65. Keep in mind that COBRA can also stop paying claims if they realize you are eligible for Medicare, yet you don’t have it.
What if I Don’t Sign Up at All?
Choosing to not enroll in Medicare when you are expected to can cost you a world of trouble. You can end up getting late penalties and delayed coverage if you don’t sign up on time. Yet we see this all time. A healthy person decides not to enroll and doesn’t realize that later he will have considerable penalties because he simply didn’t know the rules.
In this scenario, he must now wait until the next General Enrollment Period (GEP) which begins January 1st and ends March 31st. When you enroll during the GEP, your coverage doesn’t start until that July. This means that you have gone months without health coverage.
How Can I Enroll in Medicare?
Most people qualify for premium-free Part A, so you might as well enroll in at least that when you are first eligible. If you do decide to enroll in full Original Medicare when you are first eligible, you will be safe from the chaos that occurs when you don’t enroll on time.
If your group plan has decent drug coverage, you don’t have to enroll in Part D for drug coverage. Be sure to check if your group plan includes drug coverage because if it doesn’t, you will need to enroll in Medicare Part D.
You can enroll online at the Social Security website, in person at the Social Security office, or over the phone during your Initial Enrollment Period (IEP). Your IEP is a seven-month period. This one-time window begins three months before the month that you turn 65 and lasts for three months after the month that you turn 65.
Can I Disenroll from Medicare if I Return to Work?
Sometimes people retire and then decide to return to work, perhaps in a new field or part-time. If your new employer has more than 20 employees and offers health insurance coverage, you can enroll in that coverage and drop your Medicare Parts B and/or D if you want to. This will save you from paying those premiums. Be sure to confirm that your employer’s plan is equal to or better than Part D benefits so that you don’t incur a penalty later on when you re-enroll in Part D.
There is usually no need to disenroll from Part A since Part A costs nothing for most people. It can coordinate with your employer coverage and potentially reduce costs if you incur a hospital stay. Just keep in mind that you cannot contribute to a health savings account while enrolled in any part of Medicare, so if your employer plan provides an H.S.A., you’ll want to keep that in mind.
Later when you decide to stop working again, you’ll have a special election period to re-enroll in Parts B and D.
Dealing with Medicare while you are still working at 65 can be difficult. It’s important to learn what type of coverage your employer has along with what changes might be made once you get Medicare. Doing your research ahead of time can help you avoid any enrollment mistakes.
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