Do I Need To Enroll In Medicare While Still Working?, #97
Health insurance is one of the top concerns for retirees today and there seems to be a lot of confusion about when to sign up for Medicare. If you’re still working at age 65 and debating signing up for Medicare, this episode is for you! Listen as I take an in-depth look at the five things you need to know before signing up for Medicare.
You will want to hear this episode if you are interested in...
When you NEED to enroll in Medicare [1:07]
Medicare and self-employment [2:26]
What if I have COBRA insurance? [3:39]
Should I enroll in Part A? [5:13]
Exploring the Medicare enrollment timeframe [7:57]
Clarifying Medicare enrollment
If you have health insurance through your employer and you’re still working at the age of 65, you’re probably wondering how Medicare fits into the picture. You, or your spouse, can wait to enroll in Medicare until you are no longer working or you lose your health insurance, whichever comes first. This is generally true for large companies (20 plus employees) so double-check with your insurance provider or HR team to make sure you are enrolled in a group health plan as defined by the IRS. As long as the answer is yes, you can delay Medicare enrollment while you or your spouse have coverage through a qualified plan.
For those self-employed or who work for a company with less than 20 employees, you need to enroll in Medicare when you turn 65 to avoid the Part B late enrollment penalty. You definitely want to avoid this because once you are subject to it, you have to pay the Part B late enrollment penalty for life.
Getting specific about Medicare logistics and coverages
Another scenario to consider is turning 65 during a period of transition. What happens if you lose your job or retire halfway through the year? Many people have the option to use COBRA insurance which extends your existing company health insurance for up to 18 months while you figure out your next option. However, being on COBRA insurance does not exempt you from enrolling in Medicare. If you turn 65 while using COBRA insurance, you need to enroll or you will be subject to the Part B late enrollment penalty.
Additionally, a question I get often is whether or not a client should enroll in Medicare Part A. As a reminder, Part A is free to those who’ve worked for at least 10 years and helps cover the costs of a hospital stay. Part B has a monthly premium and helps cover the costs of preventative care. A common misconception is that because Part A is free, you should enroll in it as soon as you turn 65 so you have coverage for a potential hospital stay. The problem with enrolling in Part A is that if you are currently covered by a health savings account (HSA), you and your employer can no longer contribute to it and you have to take out any contribution you’ve made in the previous six months. It’s better to enroll in Part B first and wait to enroll in Part A until you no longer need an HSA. Listen to this episode for more information on when to enroll in Medicare!