Besides throwing a birthday party when you turn 65, it’s also important to think about your future health care needs. Even if you are still working and have health coverage through your employer, it’s essential to start considering when to sign up for Medicare.
If you are not receiving Social Security benefits by the time you turn 65, you won’t be automatically enrolled in Medicare. Therefore, you’ll need to choose when to sign up.
However, if you’re still working and have health coverage through your employer, you may be able to delay enrolling in Medicare.
Here are seven things to consider:
[SEE: Things You Should Know About Medicare.]
1. Employer/Company Size
Do you work for a large or small employer? If you are employed by a company with 20 or more employees and are covered under the company’s health insurance, you can delay enrolling in Medicare after turning 65 without facing any penalties.
However, if your or your spouse’s employer has fewer than 20 employees and the health coverage isn’t part of a multi-employer group plan, you must enroll in Medicare Part A and Part B at age 65. In this scenario, Medicare will be your primary insurance and be the first to pay health care costs. Your employer’s insurance will then cover any remaining costs — or be the secondary insurance — that Medicare doesn’t cover.
[Read: Medicare vs. Medicare Advantage: How to Choose.]
2. Premium-Free Medicare Part A
Once you turn 65 and you have worked for at least 10 years, you qualify for premium-free Medicare Part A (hospital insurance) and, therefore, should enroll since there is no cost to you — even if you’re still working and have health coverage.
“Medicare Part A can provide coverage for things not covered by your employer’s plan,” says Erin Nevins, president of USA Medicare Consultants in Greenville, New York. “You can wait to sign up for Medicare Part A until you retire or lose your employer health insurance, but there’s no downside for signing up as soon as you turn 65.”
[READ Medicare Allowance Explained: What You Need to Know]
3. Delaying Medicare Part B Enrollment
Many people with employer-based health insurance choose to postpone enrolling in Medicare Part B (medical insurance) while they are still employed. This allows them to avoid paying premiums for both Medicare and their employer’s insurance. In 2024, the Part B premium is $174.70, and it can be even higher for those with higher incomes.
4. Signing Up for Medicare (When You’re Ready)
You don’t need to provide notice that you’d like to delay enrolling unless you’re receiving Social Security benefits. If you are receiving benefits from the Social Security office, you’ll be automatically enrolled in Medicare Parts A and B when you turn 65, and you’ll need to let Social Security know you wish to delay Part B. By law, if you receive Social Security benefits and are eligible for Medicare, you must also have Medicare Part A.
When it’s time to notify Medicare, make sure you have your Social Security number or card ready, proof of your employment and current health insurance information. Contact Medicare at 1-800-MEDICARE or visit your local Social Security office. After you sign up, you should receive your Medicare card in the mail within a few weeks.
5. Creditable Drug Coverage
Before you officially delay Medicare, make sure you have creditable drug coverage. This means your employer drug coverage is at least as good as the standard Medicare Part D plan coverage. If your employer’s drug coverage isn’t creditable, you will need to enroll in a Part D plan during your initial enrollment period to avoid the Part D late enrollment penalty. You’ll also need to get either Part A or Part B to get a Part D plan.
6. Medicare Late-Enrollment Penalty Fees
One of the most common Medicare mistakes is not signing up on time. There are late-enrollment penalties for both Medicare Part B and Part D. If you delay enrolling in Medicare Part B, you’ll incur a permanent penalty of 10% of the standard monthly premium for each year of delayed enrollment.
“This penalty is permanent and is added to the actual premium amount, usually paid each month for as long as the individual has Medicare,” Nevins says.
There is also a late-enrollment penalty for Medicare Part A if you do not automatically qualify. For more details on late enrollment penalties, visit Medicare.gov.
7. Going Back to Work After Retirement
If you are retired and sign up for Medicare but decide to return to the workforce and receive health insurance through your job, you can cancel Part B at that time.
Later, when you retire again, you’ll have a second six-month open enrollment window to sign up for Medicare Part B again.
Bottom Line
Signing up for Medicare while still working may make sense even if you have health care insurance through your or your spouse’s job.
Medicare Part A is premium-free, so there is no cost to you. In some cases, Medicare may cover more health care expenses than your private health insurance.
It’s optional to sign up for Medicare Part B because there is a monthly premium to pay. Once you decide to retire or no longer have insurance through your own plan or a spouse’s plan, there is an eight-month special enrollment period to sign up for Medicare to avoid any penalties.
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When (and How) to Sign Up for Medicare if You’re Still Working originally appeared on usnews.com
