When it comes to Medicare and working past 65, you have some options to consider depending on your situation. Let Jeffery Insurance help you feel confident in your decision to either delay or not delay your Medicare coverage.
Delay or Don’t Delay?
If you plan on delaying Medicare while you continue to work past 65, you need to know some things first. Delaying Medicare isn’t “one-size-fits-all,” and doing it wrong can cost you.
Your Medicare enrollment choices will depend largely on your company’s size and the kind of health benefits you receive currently and want to have as you go forward. If you or your spouse work for an employer with 20 or more employees and you are signed up for their group healthcare coverage, you can delay Medicare until you decide to retire without penalty. This is because you have credible coverage. Credible coverage is coverage that is considered just as good as Medicare, meaning the coverage pays as well as Medicare does.
If you work for a company with less than 20 employees, we recommend you do not delay Medicare. Even if you have group healthcare coverage, you could still be subjected to penalty fees. Enroll in Parts A and B to avoid penalties while still keeping your group healthcare coverage. Medicare will become your primary, and your group coverage will become your secondary.
Enrolling in Medicare after Working Past 65
With delaying Medicare and working past 65, your enrollment process will look different when you retire than those who enroll during their Initial Enrollment Period (IEP). If you delay, instead of the IEP, you’ll enroll during a Special Enrollment Period (SEP). The SEP is an eight-month window that begins when you or your spouse retire or when your employer coverage expires. Delaying can also affect the different parts of Medicare, so we’ll break down the details to help you understand the enrollment process a little better.
Medicare Part A
Most people, delaying or not, will enroll in Part A when they turn 65. You earn Part A by paying into the Medicare program through payroll deductions, and quality if you or your spouse contributed to Medicare for at least 10 years. This part of Medicare is of no cost to you, and Part A can be secondary to your employer healthcare coverage if you have a hospital stay. You can apply for Part A online, just remember to delay Part B if you’re able and want to.
It’s important to note that even though Part A is free, you can’t sign up if you or your employer plan to contribute to a health savings account (HSA). If you have large employer coverage and contribute to an HSA, you should plan to delay Part A to avoid IRS penalties. Contributing to an HSA while having any part of Medicare active is cause for future tax penalties.
Medicare Part B
When you work past 65 for a large employer with group healthcare coverage, you can delay Medicare part B until you retire without penalty. As we mentioned, if you work past 65 with small employer coverage, it is not creditable coverage for Original Medicare. If you delay your enrollment, that will result in lifelong late penalties.
While enrolling in Part A is easy after you delay, Part B is a little more complicated. For Part B, your employer must complete the CMS – 40B and CMS – L564 forms and submit them to Social Security. You can submit them through the mail, take them in person to your local office, or upload the forms to the Social Security site.
Medicare Part D
If you delayed Part A and B, then you have also delayed Part D. Enrolling Part D is voluntary, but if you decide to enroll after coming off your employer coverage, it’s different than Part A and B. Instead of a SEP of 8-months (like with A and B), you only get a 2-month SEP. If you work with Jeffery Insurance, we can help you select and enroll in a Part D plan that’s right for you when the time comes.
We’re Here to Help
Retiring is supposed to be easy, but the transition from employer-sponsored benefits to Medicare can be complicated. The good news is that if you plan ahead, you can enjoy smooth sailing with your medical coverage later! If you need help making plans or understanding what actions you need to take with your Medicare and retirement plans, we’re here to help. Jeffery Insurance can answer your questions and help find you a plan tailored to your needs. We are based in Scottsdale but are happy to assist you no matter where you are in Arizona. We are Arizona’s health care resource!