Working Past 65: When to Start Medicare Coverage
As more individuals choose to work past the age of 65, understanding how and when to start Medicare coverage becomes increasingly important. Navigating Medicare alongside employer-provided health insurance can be complex, but with the right information, you can make informed decisions to ensure continuous and comprehensive healthcare coverage.
In 2023, 19% of Americans aged 65 and older were employed, which is almost double the percentage from 35 years ago. The U.S. Bureau of Labor Statistics projects that this number will increase to 21% by 2032.
Some 9% of adults ages 75 and older are employed today, about twice the share who were working in 1987 (4%).
Do I Need to Sign Up for Medicare at 65?
If you don’t have to pay a premium for Part A (Hospital Insurance), you can choose to sign up when you turn 65 or any time later. Part A is often premium-free if you or your spouse paid Medicare taxes for at least ten years.
Enrolling in Part A
Even if you have employer insurance, it’s generally a good idea to enroll in Part A when you turn 65 if it’s premium-free, as it can help cover hospital costs that your employer insurance may not fully cover.
Delaying Part B Enrollment
You can delay Part B (Medical Insurance) enrollment without a late penalty as long as you have health insurance through active employment (either your own or your spouse’s).
Once you or your spouse stop working, you have an 8-month Special Enrollment Period (SEP) to sign up for Part B without a penalty.
Verify Your Coverage Type
It’s essential to confirm with your insurance provider whether your plan qualifies as an employer group health plan. If it doesn’t, you should enroll in Medicare when you turn 65 to avoid a Part B late enrollment penalty.
Special Enrollment Period (SEP)
The SEP begins when your employment or employer health coverage ends, whichever comes first. During this period, you can:
Enroll in Part B without facing a late enrollment penalty.
Switch from a Medicare Advantage Plan to Original Medicare and add a Part D plan if necessary.
Retiree Coverage Considerations
If you have retiree coverage from a previous job, it’s crucial to understand how it interacts with Medicare. Retiree plans may require you to have both Part A and Part B to maintain coverage. Check with your benefits administrator to avoid losing your retiree benefits.
Non-Employer Health Insurance
If your health insurance isn’t from an employer, such as Medicaid, Marketplace, or another private insurance:
Medicaid/Marketplace: Contact your insurer to understand how Medicare affects your coverage.
Private Insurance: Some private insurers may reduce or deny payments if you are eligible for Medicare but not enrolled. In such cases, enrolling in Medicare ensures it pays first.
COBRA Coverage
If you have COBRA coverage after employment ends:
Sign up for Medicare when you turn 65 to avoid gaps in coverage and a Part B late enrollment penalty.
COBRA does not extend your Medicare enrollment window, so don’t wait until COBRA ends to sign up.
No Health Insurance While Still Working
If you’re still working but lack health insurance, sign up for both Part A and Part B when first eligible (usually at 65) to avoid penalties and ensure continuous coverage.
Choosing the right time to start Medicare coverage when working past 65 requires understanding your current health insurance situation and how it interacts with Medicare. Whether you have employer-provided insurance, retiree benefits, or other types of coverage, knowing when and how to enroll in Medicare can prevent penalties and ensure you have the necessary coverage. For personalized advice, consult a Medicare advisor or your employer’s benefits administrator.
By staying informed and proactive, you can navigate your Medicare enrollment effectively and make the best decisions for your healthcare needs.
Know when to enroll in Medicare
In this situation: | You need to know: |
You (or your spouse) are:
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You (or your spouse) are:
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You (or your spouse) are still working and have health insurance, but it’s not from a job (like Medicaid or Marketplace). | The rules vary depending on what type of other health insurance you have. Contact your health insurance to get more information. |
You’re still working and are self-employed or have health insurance that’s not available to everyone at the company. |
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You have COBRA coverage and haven’t signed up for Medicare yet. |
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You got COBRA coverage after you signed up for Medicare. | COBRA pays after Medicare (unless you have End-Stage Renal Disease). |
You’re still working and you (or your spouse) get a stipend from your employer to buy your own health insurance. |
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You’re still working, but don’t have any health insurance. |
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5 things to do before signing up for Medicare
Ask the employer or benefits administrator how its retiree coverage works with Medicare. You’ll want to know if your (or your family’s) current benefits will change, if they offer retirement coverage or other supplemental coverage that works with Medicare, and if any drug coverage they offer is creditable drug coverage. Get questions to ask.
Check when your current coverage ends and sign up for Medicare about a month earlier. Signing up for Medicare before your current coverage ends can help you avoid a gap in coverage.
Ask the employer to fill out the employment form. You’ll need this extra form to qualify for a Special Enrollment Period to sign up without penalty.
Find Medicare plans in your area, if you don’t have retiree coverage or if the employer doesn’t offer creditable drug coverage. If you join a Medicare Advantage Plan or Medicare drug plan, coverage starts the first day of the next month.
To avoid a tax penalty, you and your employer should stop contributing to your Health Savings Account (HSA) (if you have one) 6 months before you retire or apply for benefits from Social Security (or the Railroad Retirement Board).
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