According to Social Security, you can receive 100% of your retirement benefit at age 66 if you were born in 1943, and 67 if you were born in 1960 or later. However, Medicare eligibility begins at age 65, even if retirement does not. The real question is: What do you do about Medicare if you are 65 and still employed?
The good news is that if you, or your spouse, are still working then you may already have health coverage through an employer. What you don’t know is that your employer’s health coverage may work differently now that you are eligible for Medicare.
Before you turn 65 and are eligible for Medicare you need to talk with your employer’s health plan administrator. You need to ask some of the following:
- What kind of health plan do I have? (ie HMO)
- Does my employer require me to enroll in Medicare?
- How would my coverage work if I enroll in Medicare?
The information you get from your health plan administrator will help you with your Medicare choices and decide what is the best option for you.
Should you enroll in Part A when you turn 65?
As you probably already know, most people enroll in Medicare Part A when they turn 65 whether they are working or not because it is premium free for those who have worked and contributed to Medicare for at least 10 years. Some are automatically enrolled if they are already receiving their Social Security benefits.
When it comes to how Medicare works with your employer, there are 2 different ways. If your employer has 20 or more employees, Medicare Part A works as the secondary. If your employer has less than 20 employees Medicare is considered your primary coverage and your employer’s insurance pays as the secondary.
Now, you can always delay enrolling in Part A, and there are a few good reasons to do so. For example, if you enroll in Medicare you can no longer contribute to a health savings account.
What about enrolling in Part B?
Enrolling in Medicare Part B is not for everyone, and it’s very important to find out exactly how Part B would work with your employer’s plan before making your decision.
The only time you would have to enroll in Part B is if you worked for a company with less than 20 employees. Generally, in this circumstance, you must sign up for Part B since Medicare would be acting as your primary insurance.
Other than that, most delay enrolling in Part B to avoid paying the premium. You can sign up for it later during a Special Enrollment Period without paying the penalty as long as you sign up within 8 months of leaving your job.
Do I really need my employer’s insurance coverage?
No, you can always choose to decline your group coverage and enroll in Medicare. There are a few things you need to remember before choosing that option:
- For the same monthly cost and annual out of pocket costs, your group health plan may cover a larger amount of your health care costs than Medicare. Plus they may also have other benefits included that Medicare does not offer.
- Any family members covered by your group plan will lose their health insurance because Medicare only covers the individual.
- In the event that you change your mind, it may be near impossible to re-enroll in a job-related group health plan.
- Like we mentioned earlier, once you enroll in Medicare you cannot make new contributions to a Health Savings Account, so using pretax income to pay for any future health care may not be possible.
As you can see you have plenty of options if you are still working after you become eligible for Medicare. Just take the time to talk to your employer’s health care plan administrator to find out how things will work for you once you become eligible, and then weigh out your options.
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