Get Medicare while you are still working
Even if you’re still at work, don’t miss your initial enrollment period
Nowadays, many people work beyond the retirement age of 65. Because people live longer and have healthier lives, many are putting off retirement to continue building their savings and collecting work benefits. Although there is a monetary incentive to wait until full retirement age to collect Social Security benefits, most people should enroll in Medicare as soon as they’re eligible. It’s possible to carry both Medicare and private insurance in many cases, thus registering doesn’t have to mean losing the coverage you already have.
Please note that the following information refers to those who are still actively working. Suppose you stopped working but have COBRA when you are eligible for Medicare. In that case, your COBRA coverage will end, and you will need to enroll in Medicare immediately.
Register for Part A
Part A is the most essential part of Medicare and covers hospital-related costs. If you’ve already earned your 40 work credits, which means you’ve paid at least 10 years of Medicare taxes, you’ll get this part without having to pay any monthly premiums.
Since Part A costs nothing, even people still covered by an employer’s insurance plan must enroll during their Individual Enrollment Period. This is the seven-month period that begins three months before your 65th birthday. Once your Medicare Part A goes into effect, you will have a kind of dual coverage. Any hospital-related care will be covered by your private insurance first and Medicare second.
Although most people will benefit from signing up for Part A as soon as they are eligible, there are two important exceptions:
The first is if you have a Health Savings Account (HSA). If you have an HSA, neither you nor your employer can continue to contribute once you have enrolled in Medicare. So if you want to squeeze in a few more years of HSA savings, it may be in your best interest to postpone enrolling in Part A.
However, keep in mind that the IRS will charge you a tax penalty if you sign up for Part A more than six months after your 65th birthday. When you register, the IRS will consider you retroactively enrolled for the previous six months. This means that you will have to pay taxes on any Health Savings Account (HSA) contributions you have made during that time. To avoid this situation, be sure to stop contributing to your HSA six months before signing up for Part A.
The second exception is when you don’t meet the requirements for premium-free Part A: If you have not earned your 40 work-credits and cannot claim them through your spouse, you will pay a Part A premium. Suppose you are currently working towards those credits. In that case, you will save money by waiting to enroll until you qualify for Part A without paying a premium.
Register for Part B
Part B always has a premium. For most people, it is $135.50 per month. But when you get insurance with an employer that has more than 20 employees. Medicare will allow you to postpone enrolling in Part B without penalty, even if you acquire the insurance through your spouse.
When your employer has less than 20 employees, you will want to enroll in Part B during your Individual Enrollment Period (IEP). You can also keep your employer’s insurance plan. Still, Medicare will become your primary insurer, covering expenses before your private insurance plan takes effect.
If you want to delay enrollment in Part B, please speak with your benefits administrator to determine when to enroll. Some private insurance plans require you to register in Parts A and B to get full coverage through their plan. Your benefits administrator can help you understand how Medicare will work with your current plan. How to reduce your premium and how to ensure you never run out of coverage.
Remember that Medicare will automatically register you in Parts A and B once you turn 65 if you collect Social Security, even if you are still working. If this is the case, you will need to contact your Social Security office to avoid Part B’s automatic enrollment.
Part D, Medicare Advantage, and Medigap
Once you are no longer covered by employer insurance, Medicare will grant you a Special Enrollment Period (SEP) for Part D, Medigap, and Medicare Advantage. During this time, insurers cannot deny coverage or charge you an additional amount based on your age or medical history. Once your special enrollment period ends, there is no guarantee that a private insurer will cover you.
For Part D and Medicare Advantage, your Special Enrollment Period (SEP) lasts for two months after the month your private coverage ends. For Medigap, open enrollment lasts for six months and begins when you sign up for Part B.