Do I Need to Sign Up for Medicare If I Am Still Working?
I will turn 65 in a few months and plan to keep working for several more years. I have good health insurance from my employer now. Do I have to sign up for Medicare when I reach 65?
If your health insurance is covered through your employer, the decision to enroll in Medicare at 65 will depend on the size of your employer and your plans to continue working. The same rules apply if your health insurance comes from your spouse's employer.
First, let us review the basics. Original Medicare has two parts. Part A provides hospital coverage and is free for most people. Part B covers doctor's bills, lab tests and outpatient care. Part B has a monthly premium, which is $148.50 for most beneficiaries in 2021, but higher for individuals earning above $88,000.
If you are already receiving Social Security, you will automatically be enrolled in parts A and B when you turn 65. You will receive your Medicare card in the mail. It will include instructions to return it if you have work coverage that qualifies you for late enrollment. If you are not yet receiving Social Security, you can apply online at SSA.gov/medicare.
If you plan to continue working past age 65 and have health insurance through your employer, your first step is to ask your benefits manager or human resources department how your employer insurance interacts with Medicare. In most cases, you should at least enroll in Medicare Part A because it is free. If you are funding a health savings account (HSA), you may not want Part A because you cannot make contributions after you enroll. The decision to obtain Part B coverage will depend on the size of your employer.
If your current employer has fewer than 20 employees, Medicare can be your primary insurer and you should enroll in Medicare Part B during your initial enrollment period. This is a seven-month period that includes the three months before, the month of, and the three months after your 65th birthday.
If you miss the seven-month sign-up window, you will have to wait until the next general enrollment period, which runs from January 1 to March 31 with benefits beginning the following July 1. You will also incur a 10% penalty for each year you wait beyond your initial enrollment period. The penalty will be added to your monthly Part B premium.
If your employer has 20 or more employees, your employer's group health plan can be your primary insurer while you are employed. In this case, you do not need to enroll in Part B when you turn 65 if you are satisfied with the coverage you receive through your employer. If you decide to enroll in Medicare, it will supplement your employer insurance by paying secondary on all your claims.
Once your employment or group health coverage ends, you will have eight months to sign up for Part B without a penalty. This is known as a Special Enrollment Period.
You should verify your prescription drug coverage. Call your benefits manager or insurance company to find out if your employer's prescription drug coverage is considered "creditable." If it is, you do not need to enroll in a Medicare Part D prescription drug plan. If it is not, you should purchase a plan during your initial enrollment period or you will incur a premium penalty of 1% of the average national premium for every month you do not have coverage. You can review plans at Medicare.gov/plan-compare.
If you need help or have more questions, contact your State Health Insurance Assistance Program, ShiptaCenter.org, which offers free Medicare counseling. You may also call the Medicare Rights Center helpline at 800-333-4114.
Savvy Living is written by Jim Miller, a regular contributor to the NBC Today Show and author of "The Savvy Living" book. Any links in this article are offered as a service and there is no endorsement of any product. These articles are offered as a helpful and informative service to our friends and may not always reflect this organization's official position on some topics. Jim invites you to send your senior questions to: Savvy Living, P.O. Box 5443, Norman, OK 73070.
If your health insurance is covered through your employer, the decision to enroll in Medicare at 65 will depend on the size of your employer and your plans to continue working. The same rules apply if your health insurance comes from your spouse's employer.
First, let us review the basics. Original Medicare has two parts. Part A provides hospital coverage and is free for most people. Part B covers doctor's bills, lab tests and outpatient care. Part B has a monthly premium, which is $148.50 for most beneficiaries in 2021, but higher for individuals earning above $88,000.
If you are already receiving Social Security, you will automatically be enrolled in parts A and B when you turn 65. You will receive your Medicare card in the mail. It will include instructions to return it if you have work coverage that qualifies you for late enrollment. If you are not yet receiving Social Security, you can apply online at SSA.gov/medicare.
If you plan to continue working past age 65 and have health insurance through your employer, your first step is to ask your benefits manager or human resources department how your employer insurance interacts with Medicare. In most cases, you should at least enroll in Medicare Part A because it is free. If you are funding a health savings account (HSA), you may not want Part A because you cannot make contributions after you enroll. The decision to obtain Part B coverage will depend on the size of your employer.
Small Employer
If your current employer has fewer than 20 employees, Medicare can be your primary insurer and you should enroll in Medicare Part B during your initial enrollment period. This is a seven-month period that includes the three months before, the month of, and the three months after your 65th birthday.
If you miss the seven-month sign-up window, you will have to wait until the next general enrollment period, which runs from January 1 to March 31 with benefits beginning the following July 1. You will also incur a 10% penalty for each year you wait beyond your initial enrollment period. The penalty will be added to your monthly Part B premium.
Large Employer
If your employer has 20 or more employees, your employer's group health plan can be your primary insurer while you are employed. In this case, you do not need to enroll in Part B when you turn 65 if you are satisfied with the coverage you receive through your employer. If you decide to enroll in Medicare, it will supplement your employer insurance by paying secondary on all your claims.
Once your employment or group health coverage ends, you will have eight months to sign up for Part B without a penalty. This is known as a Special Enrollment Period.
Check Drug Coverage
You should verify your prescription drug coverage. Call your benefits manager or insurance company to find out if your employer's prescription drug coverage is considered "creditable." If it is, you do not need to enroll in a Medicare Part D prescription drug plan. If it is not, you should purchase a plan during your initial enrollment period or you will incur a premium penalty of 1% of the average national premium for every month you do not have coverage. You can review plans at Medicare.gov/plan-compare.
If you need help or have more questions, contact your State Health Insurance Assistance Program, ShiptaCenter.org, which offers free Medicare counseling. You may also call the Medicare Rights Center helpline at 800-333-4114.
Savvy Living is written by Jim Miller, a regular contributor to the NBC Today Show and author of "The Savvy Living" book. Any links in this article are offered as a service and there is no endorsement of any product. These articles are offered as a helpful and informative service to our friends and may not always reflect this organization's official position on some topics. Jim invites you to send your senior questions to: Savvy Living, P.O. Box 5443, Norman, OK 73070.
