Millions of Americans age 65 or older are still working. They may have employer-based health insurance or a retiree plan. If you have employer-based group health coverage, you can delay enrolling in Medicare until you leave the job or lose your company’s coverage. You’ll then get an eight-month Special Enrollment Period to sign up. Group health plans are a popular way for employers to provide a tax-free benefit to employees. However, this coverage can be costly for both the employee and the employer.
One of the biggest challenges facing group health plans is escalating costs. Fortunately, brokerage firms can help employers find solutions to meet their needs and budgets. Those still working and have group health coverage from an employer are automatically eligible for Medicare. Whether Medicare will coordinate with the employer's plan depends on the company's size.
Generally, groups must offer group health insurance to employees until they reach age 26 or until the individual is no longer an active employee. This includes retirees and those who are on unpaid leave or who have part-time or seasonal employment.
A growing number of workers are still working well past age 65. This means they may have health care coverage and may be eligible for premium tax credits or lower out-of-pocket costs based on their income. Whether it makes sense to sign up for Medicare at 65 or to keep your employer-based health insurance depends on the cost and benefits of each option. It also depends on your expected medical expenses.
If you have a retiree group health plan that pays secondary, study the plan's benefits booklet to find out what it covers and how it works with Medicare. It would be best if you then decided whether to keep the plan or drop it and buy a Medicare Supplement Policy or a Medicare Advantage Plan.
If you or your spouse are still working at 65 and have health coverage through an employer plan with 20 or more employees, you don't have to sign up for Medicare. But you will want to do so within eight months of stopping or losing your employer's group health coverage, whichever comes first.
If your employer plan has less than 20 employees, you must sign up for Medicare Parts A and B as soon as you become eligible. You can delay your enrollment in Part A and avoid a late enrollment penalty by signing up during your Special Enrollment Period (SEP), which starts the month after you stop working or lose employer-based coverage.
For more information about your employer's plan and the options you have, consult with your benefits administrator. Getting the details on what's covered and how it works with Medicare before making an informed decision will help you make the most of your options.
You may not have to sign up for Medicare at 65 if you are still working and have health savings accounts (HSAs) from your job. These accounts allow you to set aside money to pay for qualifying medical expenses now and in the future. If you're considering delaying your Medicare enrollment, you should speak with your benefits administrator before making final decisions.
Some people delay enrolling in Part B of Medicare if they have employer health insurance because they're happy with the coverage and want to contribute to their HSA. However, if you delay enrollment, you could face a monthly Part B late enrollment penalty for each month you don't have Medicare coverage.