Turning 65 means you have reached a great milestone in life. For many Americans, this is where retirement begins. That can bring big changes to your current health coverage.
If you’re about to be 65 (or know someone about to be 65), then it’s time to start thinking about Medicare. If you wait to enroll, you could end up having a Part B penalty. You could also experience a gap in coverage.
Below, we’ll discuss when you should apply for Medicare if you’re still working.
When to Apply for Medicare if I’m Still Working
Even if you have health insurance through an employer, you should sign up for Part A when you turn 65. If you paid Medicare taxes while you worked, most people do, then you won’t have to pay a premium for Part A.
Depending on the health coverage your employer offers, you might want to enroll in Part B. Everyone pays a Part B premium, the amount varies depending on income.
If your employer has more than 20 employees
If your employer has 20 or more employees, you do not need to enroll in Medicare if you don’t want to. Your employer’s group coverage is the primary payer, which means they pay first on healthcare bills you have. You can delay enrollment into Medicare until you stop actively working and retire.
If your employer has less than 20 employees
If your company has fewer than 20 employees, you must sign up for Medicare as soon as you are eligible. If you do not sign up, the group plan can refuse to pay your claims. Then when you finally sign up for Medicare, you will be faced with late enrollment penalties.
If you work for a large company, it’s important that you compare your employer coverage and Medicare. You can have Medicare Part A (which if you paid Medicare taxes while working, Part A has no premium), and your employer group plan at the same time.
If you keep your large employer group coverage, you’ll have a Special Enrollment Period after you leave your job. You qualify to sign up for Part A, Part B, Part D, and a Medicare Supplement plan without penalty.
Suppose you quit working in October and you do not sign up for Medicare. In May, your retiree or COBRA plan realizes you are eligible for Medicare and stops paying your claims.
It’s very important to talk to your employer’s benefits coordinator before you decide what to do. Your benefits may change if you enroll in Medicare, even if you just enroll in Part A.
Returning to Work and Cancelling Part B
If you go back to work and obtain creditable employer coverage, you can cancel Part B. Then, when you retire again, a 6-month Open Enrollment Period to enroll in Medigap with no health questions will be allowable.
This means you could have two OEP’s if this situation presents itself.
Medicare isn’t all you should be thinking about
Medicare doesn’t cover long-term home care or residence in an assisted living facility or nursing home. Having a private insurance policy to help pay for these things can be expensive.
If you don’t have a policy, your mid-60s is the last age at which buying a new policy is affordable for most people.
The full retirement age is 66. Then, you can claim your full Social Security retirement benefits without any penalty for continuing to earn an income.
Some people reduced the benefits and received Social Security as early as age 62. Others wait until after full retirement age, up to 70 years old, to claim higher benefits. Deciding when it is best to claim Social Security benefits can take a little planning.
If you have low income and few assets, you could qualify for full medical coverage and direct financial help if you are 65 and over. Medicaid can pay the full cost for long-term home care and nursing home residents.
In addition to Social Security benefits, you could receive Supplemental Security Income which would provide small monthly cash assistance.
Getting legal documents in order can make sure your wishes are followed. This is in regards to healthcare, including end of life care, ongoing finances, and your estate. You should include in these documents an advance medical directive (living will), a power of attorney for finances, and a will.
Medicare can be complicated, but there are plenty of resources out there to help you along the way. For help with decisions involved with signing up for Medicare, give one of our senior Medicare agents a call at the number above. If you’re in the process of enrolling in Part B, make sure to compare rates in your area for a Medicare Supplement plan.