Signing up for Medicare has additional considerations if you’re still working. Here we’ll show you some tips on how it works and how to avoid common mistakes.
Is it necessary to sign up for Medicare when I turn 65?
It all depends on how many employees are employed where you work and how you get your health insurance now.
- You don’t have to sign up for Medicare if you have job-based health insurance and are still working (as long as your coverage is considered creditable with Medicare. Check with your HR department). You also have the option to sign up after you lose your health insurance or after you stop working.
- If you have a type of health insurance available to only some at the company or are self-employed, you should ask if your coverage is employer group health plan coverage. If not, you can avoid a Part B late enrollment penalty by signing up for Medicare when you turn 65.
- If the employer has less than 20 employees, avoid having gaps in your job-based health insurance by signing up for Medicare when you turn 65.
- If you have COBRA coverage, it will most likely end when you sign up for Medicare. Notably, Cobra is not considered credible coverage with Medicare.
How will Medicare work with my job-based health insurance?
Here are some things to keep in mind:
- Most people qualify for a part A without paying a monthly premium. If you do qualify, you can sign up for Part A coverage starting three months before you turn 65 and ending three months after the month you turn 65.
- You and your employer should stop contributing to your health savings account six months before you sign up for Part A or apply to get Social Security benefits for you to avoid a tax penalty.
- If right now you’re working and your job has less than 20 employees: Medicare is supposed to pay for services first, and your job-based insurance will pay you second. You must sign up for Part A and Part B, or your job-based insurance might not cover the costs for all the services that you get. You must ask your employer (who provides you with your health insurance) if it’s necessary to sign up for Part A and Part B as soon as you turn 65.
- If you’re currently working and your employer has more than 20 employees: Your job insurance will pay you first, and afterward, you will get Medicare. What if you don’t have to pay for a premium Part A? If that is the case, you can sign up when you turn 65 or later. To sign up for Part B, you can wait until you’re out of work or sign up when you lose your health insurance if that happens first.
- What if you get a stipend from your employer to buy your health insurance, or you’re still working, and you don’t receive health insurance from that job? Medicare will not work with your insurance. Right when you sign up, Medicare will pay first. If you’re eligible for Medicare and have private insurance, they may lower your payments or not pay anything. You should know if you need to sign up for Part A and/or Part B when you turn 65.
>> Related: Did You Know You Could Be Eligible for Additional Benefits?
How do I know if I need to get Medicare Drug Coverage (Part D)?
You can get this coverage once you already have Part A or Part B. You can join a Medicare drug plan at any moment while you have job-based health insurance, but if you lose that health insurance, you have up to two months to get it.
- If you want to avoid the Part D late enrollment penalty, which you can get even if you have a special enrollment period to join a plan, you should not go more than 63 days in a row without Medicare drug coverage or other creditable drug coverage.
- If you have a different drug coverage, you should ask your drug plan if it’s creditable drug coverage with Medicare. Your plan is responsible for telling you each year if your non-Medicare drug coverage is creditable.
- What do I need to do if I don’t have drug coverage? To avoid a Part D late enrollment penalty, you should join a Medicare drug plan or Medicare Advantage plan that has drug coverage within three months of when your Medicare coverage starts.
- What if I have drug coverage that’s creditable? You can wait to get Part D (Medicare drug coverage). Also, if your drug coverage gets switched to not creditable, you must join a Medicare drug plan within two months. You will only get the Part D late enrollment penalty if you go up to 63 days without creditable drug coverage.
- What if I have drug coverage that’s not creditable? You should join a Medicare drug plan with drug coverage within three months from when your Medicare coverage starts to avoid the monthly Part D late enrollment penalty. You’ll have two months to join a Medicare drug plan if your other drug coverage switches to not creditable. You will only get a penalty if you go up to 63 days without having creditable drug coverage.
Part A late-enrollment penalty
Some people must purchase Part A because they don’t qualify for premium-free Part A. If you have to purchase Part A and you forgot or didn’t buy it when you were first eligible for Medicare, your monthly premium may rise to 10%, and then you’ll have to pay for twice the number of years you didn’t sign up.
Part B late enrollment penalty
Your monthly premium may go up by 10% for each 12-month period that you could’ve had Part B but chose not to sign up. This could happen if you didn’t get part B when you were first eligible. You’ll get charged with this penalty every time you pay for Premiums for as long as you have Part B.
Where do I buy Medigap?
If you’ve decided to buy a Medigap policy, the best time is during your 6-month enrollment period. Even if you have health problems during that period, you can purchase any Medigap policy sold in your state. This period begins automatically the first month you have Medicare Part B, and you are 65 or older. You may not be able to buy a Medigap policy after this period if you cannot pass underwriting.
During open enrollment
Medigap companies are permitted to use medical underwriting to decide on accepting your application and decide how much to charge you for the Medigap policy. However, during your open enrollment period, even if you have health problems, you can purchase any policy the company sells for the same price as people with good health.
Outside open enrollment
There’s no guarantee that you will be sold a Medigap policy if you apply for Medigap after your open enrollment period and don’t meet the medical underwriting requirements. In some states, you may buy another Medigap policy called Medicare Select. If you purchase this policy, you have the right to change your mind before 12 months have passed, and you’ll be able to switch to a standard Medigap policy.
Need help navigating your Medicare coverage with your travel plans? Give Karen or Matt a call at 865-203-2040 or email at contact@bigorangemedicare.com!
*Medicare Insurance Specialty Group is Not Approved By, Endorsed By, or Affiliated With A Government Agency. We do not offer every plan available in your area. Any information we provide is limited to those plans we do offer in your area. Please contact Medicare.gov or 1-800-MEDICARE to get information on all of your options.