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These days, many people continue working well beyond age 65. One of the most common misconceptions I hear is:
“I’m still working, so I don’t need Medicare yet.”
The truth is, that’s not always the case.
Whether you should enroll in Medicare depends on several factors, including the size of your employer and the type of health coverage you have.
In some situations, delaying Medicare is perfectly appropriate. In others, delaying enrollment could lead to:
- Gaps in coverage
- Unexpected medical bills
- Lifetime late enrollment penalties
It’s also worth knowing that some people actually save money or receive better coverage by enrolling in Medicare, even if they still have access to an employer health plan.
The best choice depends on your individual situation.
Can You Delay Enrolling in Medicare?
If you’re turning 65 and are still working, you may be able to delay enrolling in Medicare without a late enrollment penalty, but only if you meet certain requirements.
You can generally delay enrolling in Medicare Part B if:
- You or your spouse are actively employed.
- You are covered by an employer group health plan based on that active employment.
- The employer has 20 or more employees, and the coverage is considered creditable.
Does COBRA Count as Creditable Coverage?
COBRA does not count as creditable coverage for delaying enrollment in Medicare Part B.
If the necessary conditions are met, you can usually wait to enroll in Part B until your employment or employer coverage ends. At that point, you’ll have a Special Enrollment Period to sign up without incurring a late enrollment penalty.
Medicare Enrollment Can Take Longer After a Delay
I recommend reaching out to me three months before you plan to retire so we can develop the best strategy and help ensure that you do not experience a gap in coverage.
The process of enrolling in Medicare Parts A and B can take longer after a delay because it involves submitting a form completed by the employer that provided your creditable coverage. This form verifies that you were covered after becoming eligible for Medicare at age 65.
If you delayed Medicare and have lost your creditable coverage, contact me right away.
Should You Still Enroll in Medicare Part A?
Even if you delay Part B, many people choose to enroll in Medicare Part A when they turn 65 because:
- Most people pay no monthly premium for Part A based on their work history.
- Part A can provide additional hospital coverage while working alongside employer insurance.
- Enrolling in Part A can help reduce some out-of-pocket hospital costs if you are hospitalized.
However, Part A isn’t always the right choice.
If you contribute to a Health Savings Account, or HSA, enrolling in any part of Medicare, including premium-free Part A, means you can no longer make HSA contributions.
For some people, continuing to fund an HSA is more valuable than enrolling in Part A right away.
Because everyone’s situation is different, it’s important to weigh the advantages of Part A against the impact it may have on your HSA and overall health coverage before enrolling.
Important Things to Know About Medicare While Working Past 65
Part A Is Often Premium-Free
Most people qualify for premium-free Part A based on their work history, so many choose to enroll in Part A at age 65 even if they continue working.
Medicare and Health Savings Accounts
Once you’re enrolled in any part of Medicare, you can no longer contribute to an HSA.
If you plan to continue making HSA contributions, be sure to understand the enrollment timing before signing up for Medicare.
Leaving Your Job?
When your employer coverage ends, you’ll generally have an eight-month Special Enrollment Period to enroll in Medicare Part B without a late enrollment penalty.
Waiting too long, or relying on COBRA instead of enrolling in Medicare, can result in permanent penalties and gaps in coverage.
Not Sure Which Medicare Rules Apply to You?
The rules can be confusing, and every situation is different.
A quick review of your employer coverage and Medicare options can help you avoid costly mistakes and determine whether enrolling now or waiting is the best decision for you.
Don’t Guess: Medicare Penalties Can Last a Lifetime
One of the biggest misconceptions is that you can simply enroll later if you change your mind.
In some cases, that’s true. However, if you delay Medicare when you weren’t actually eligible to do so, you could face permanent late enrollment penalties.
For example, the Part B late enrollment penalty is generally added to your monthly premium for as long as you have Part B.
Because these penalties can last for the rest of your life, it’s worth taking a few minutes to make sure you’re making the right decision before delaying enrollment.
