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When to Sign Up for Medicare if You Are Still Working

If you are still working and are close to age 65, you may wonder when the best time is to sign up for Medicare. Deciding to sign up for Medicare while still working can be confusing and involve several considerations, such as if you are still covered by an employer-sponsored health plan, your retirement age, and how to coordinate your health coverage.

Key takeaways:

This article will discuss the various factors to consider when deciding when to sign up for Medicare if you are still working.

Do you have to sign up for Medicare at age 65 if you are still working?

If you are age 65 or over and still working, you may be able to delay Medicare enrollment. But the answers are not simple. Each decision has pros and cons, and exceptions, fees, and penalties complicate Medicare coverage. The following information also applies to a spouse covered under the working person’s health benefits.

Most Americans who have worked for at least ten years and paid Medicare taxes are eligible for premium-free Medicare Part A (hospital insurance) at age 65. You also have the option to sign up for Medicare Part B (medical insurance) at the same time. Medicare Part B has a monthly premium.

If you are still employed with a company in excess of 20 employees and have employer-based health insurance, you can delay enrolling in Medicare Parts A and B. You can also enroll in Medicare Part A while delaying Part B.

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Should I enroll in Medicare Part A if I am still working?

Many working Americans sign up for Medicare Part A during their initial enrollment period because it is free if they have worked for at least ten years and paid the applicable Medicare taxes. There is no premium, and it becomes a secondary policy to your employer-based primary insurance policy. Your primary policy is applied to any medical claims first. Medicare Part A is secondary and may provide additional coverage for claims. It is potentially a cost-effective choice.

If you are already receiving social security benefits, you are automatically enrolled in Medicare Part A upon eligibility at age 65.

Is it mandatory to sign up for Medicare at age 65?

While most people sign up for Original Medicare (Parts A and B) at age 65, it is not mandatory if you or your spouse is still working. You can remain on your employer-based health coverage until you leave the job or the coverage ends, whichever happens first.

Suppose you choose to forgo the initial enrollment period when you first become eligible for Medicare. In that case, you can usually enroll without facing penalties within eight months of losing your employer-backed insurance; this is the special enrollment period.

If you do not sign up during this eight-month period, you will need to wait until the next open enrollment period, which could result in a coverage gap. Additionally, you could pay a penalty for delaying enrollment. If you work for an employer with fewer than 20 employees, you may be required to enroll in Medicare as your primary coverage, and the employer coverage would be secondary if you choose to keep it.

If you have a high deductible health insurance plan and put money in a health savings account (HSA), you cannot enroll in Medicare; likewise, if you have an HSA and plan to retire, you must stop contributions about six months before signing up for Medicare.

How do I sign up for Medicare for the first time?

The initial enrollment period is your first chance to enroll in Medicare. The period begins three months before your 65th birthday and extends three months after for a total of seven months. You can sign up online through the Social Security Administration or at a local Social Security office. You can also sign up by calling Social Security at 1-800-772-1213.

When should I sign up for Medicare Part B if I am still working?

Many working Americans delay Medicare Part B enrollment because the premiums are $164.90 per month or higher in 2023 and may not be cost-effective as secondary coverage. For example, if your employer plan offers adequate coverage, there may be little left for Part B to cover. As a secondary policy, Medicare does not always cover additional out-of-pocket costs remaining from your primary plan. Paying for Medicare Part B may cost you more out of pocket.

You can sign up for Medicare Part B when you decide to stop working or lose your employer-sponsored insurance if you do it with the eight-month special enrollment period.

If you enroll in Medicare Part B and have employer insurance, you may have challenges getting a Medigap plan once you stop working. If over six months have passed since you enrolled in Part B, insurers can reject your Medigap application due to pre-existing conditions or charge higher premiums. You could offset this issue by delaying Medicare Part B enrollment.

Do I need to sign up for Medicare if I have employer insurance?

If you are 65 or older and currently employed, you are not required to enroll in Original Medicare (Parts A and B) unless your employer's health plan no longer covers you. Some companies that employ fewer than 20 employees can save money by requiring Medicare-eligible employees to switch coverage. Large companies employing over 20 people must offer you the same coverage as younger staff.

If you work for a larger employer, you will have three options:

  1. Keep your employer-based insurance coverage and delay Medicare enrollment.
  2. Enroll in Medicare only and refuse your employer-based coverage.
  3. Keep your employer-based coverage as primary and enroll in Medicare as a secondary plan.

If you are planning to retire and nearing the initial enrollment period or are over 65 with plans to retire soon, you should sign up for Medicare. If you do not intend to retire soon, you may want to discuss your options with your employer benefits specialist and a Medicare representative before making a decision. Understanding when to enroll in Medicare while still working can ensure you have the medical coverage you need now and at retirement.

How much money will Medicare cost if I am still working?

If you have employer-sponsored health insurance, you do not need to enroll in Medicare at age 65. However, rules can vary slightly by the size of your employer and the plans offered. It is important to talk with your company benefits specialist and explore the options available to you so you can make the best decision regarding your health coverage.

You can compare plans to decide the right choice for you. Things to consider include the following:

  • Medical coverage
  • Vision coverage
  • Drug coverage
  • Provider networks
  • Deductibles
  • Copays
  • Co-insurance.

If you decide to enroll in Medicare and have met the work and tax requirements, Medicare Part A is free, meaning there are no monthly premiums, but you will still need to pay deductibles, co-insurance, and co-pays for medical care. If you do not meet the work and tax requirements, monthly premiums for Medicare Part A could be up to $506.

Medicare Part B monthly premiums are income based. If you make under $97,000 a year as an individual, your monthly Part B premium is $164.90 in 2023. Individuals with higher incomes pay more for Medicare Part B.

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