If you are approaching 65 years of age, are still working and plan to continue to do so for the next few years, do you need to enroll in Medicare if you receive coverage from your employer?
Even though you can enroll in Medicare three months before your 65th birthday, you may want to delay enrolling and continue using your employer’s plan until you retire.
Fortunately, Medicare special enrollment periods allow most people who are still working at age 65 with employer coverage to delay enrollment in Parts A, B, C and D without any penalties.
If you’re unsure, you may want to follow these tips:
Know when you are eligible to delay enrollment
If you or your spouse are still actively working for a company with at least 20 full-time employees and you get health insurance and drug coverage through them, you are most likely eligible to delay enrollment in any of the parts of Medicare until you or your spouse retires – with a few exceptions.
If you have COBRA coverage or you work for a company with fewer than 20 employees, then you may consider joining Medicare at 65.
Why Delay?
If you stay with your employer-sponsored plan (that has over 20 employees), your insurance will likely be the primary payer and Medicare the secondary payer.
If you have Medicare as well as other health insurance or coverage, “coordination of benefits” rules decide which one pays first.
If your employer health plan doesn’t pay all of your bill, the doctor or health care provider should send it to Medicare for secondary payment. Medicare will look at what your group health plan paid and may pay any additional costs up to the Medicare-approved amount. You’ll have to pay whatever costs Medicare or whatever amount the employer health plan doesn’t cover.
However, if your employer’s health insurance covers more of the costs than Medicare does, in those instances, Medicare would not be tapped for payment. In other words, you are unlikely to see any cost savings under Medicare if you have both.
The Takeaway
For most people, it often makes sense to delay enrollment in Medicare until you retire.
However, it might also make sense to enroll right away in some parts of Medicare and delay enrollment in others. For example, you may want to enroll in Part A when you first become eligible, because it is free for most people. But you may want to forgo enrollment in Medicare Part B or D because the coverage would likely be on par with your employer-sponsored health plan. Each situation can be tricky – be sure to check with your consultant before you make any lifelong decisions.
Jay is a graduate of the University of Pennsylvania School of Dental Medicine and also has an MBA from San Francisco State University. He has worked for a number of insurance carriers and brokers over the past 25 years. At UBF, Jay specializes in advocating for our clients in various issues, including grievances, benefit inquiries and eligibility issues.