If you are 65 or about to turn 65, and you’re still employed, you might be wondering if you must enroll in Medicare at all. The answer is – it depends.
With CNBC reporting the percentage of people in the workforce ages 65 to 74 expected to swell to 30.2% by 2026 – by comparison, they made up 26.8% of the workforce in 2016 – it’s important to know. However, there are some exceptions.
If your employer has fewer than 20 employees, it’s possible you’ll need to sign up for Medicare at age 65, in order to avoid gaps in your employer-based health coverage. But check to be certain.
Self-employed at age 65
Do you work for yourself? Or do you have medical coverage not available to all at your job? In either instance, you should verify with the insurance company if the coverage is considered an employer group health plan or not. This is as defined by the Internal Revenue Service. If it’s not, you should enroll in Medicare at age 65 so you don’t have to pay a late enrollment penalty for Medicare Part B (medical coverage). The penalty is 10% for each
12-month period you put off enrolling in Part B.
Age 65 with COBRA insurance
You might be asking what happens if you have COBRA coverage. To avoid both a coverage gap and Part B penalty for late enrollment, if you have
COBRA insurance, go ahead and sign up for Medicare at age 65. Typically, your COBRA coverage will end once you do.
Medicare Part A
Most people don’t have to pay a premium for Medicare Part A (hospitalization coverage). That’s because they contribute a sufficient amount of payroll taxes during their years of employment to qualify for a no-cost premium. This is why you can enroll in Part A while still working. Keep in mind, though, if you have a Health Savings Account, or HSA, you’ll have to stop contributing to it once you sign up for Medicare.
Medicare Part D after age 65
What if you want to enroll in Medicare Part D, prescription drug coverage? You’ll be eligible as soon as you sign up for either Medicare Part A or Part B. You can either join a Medicare drug plan or a Medicare Advantage (MA) plan with drug coverage at the same time you’re covered by employee group health insurance. Furthermore, you can join up to two months after you no longer have that job-based coverage. Just be sure you don’t have any gaps in prescription medication coverage, whether it’s through your employer or Medicare. Any employer drug coverage must offer the same value as Medicare Part D. Otherwise, you may have to pay a late enrollment penalty for Part D.
Time’s running out – act now!
If you are turning 65 or already 65 and still working, you’ve got some important decisions to make about Medicare, if you haven’t done so already, and little time left to make them.
Not sure exactly what to do? We’re here to help you make sense of it all. Our experts will be happy to walk you through the process to determine which steps to take, based on your situation and budget.