Do I Need to Sign Up for Medicare at 65 If I’m Still Working?
Turning 65 is a major Medicare milestone. Signing up on time is key to avoiding gaps in coverage and a monthly Part B late enrollment penalty. However, if you’re still working, you may be able to delay the initial Medicare enrollment period altogether.
Since healthcare is one of the most significant retirement costs, it’s crucial to understand your Medicare options. In this week’s Money Wisdom Question Series, Heath Grossman, CFP® sheds light on when you can push Medicare enrollment and when you must sign up.
When You Can Delay Medicare Coverage
At 65, you may not need to sign up for Medicare Parts A and B (Original Medicare) if you have health coverage through an active employer. This can be your own or your spouse’s employer, as long as the company has 20 or more employees. This type of employer health coverage allows you to delay joining Part B without paying a late enrollment penalty.
Keep in mind that many people still enroll in Medicare Part A at 65 because it is usually premium-free. However, once you enroll in Part A, you can no longer contribute to a health savings account (HSA).
When You May Have to Enroll in Medicare
On the other hand, if your or your spouse’s active employer has fewer than 20 employees, you will need to enroll in Original Medicare. Federal coordination of benefits rules would therefore make Medicare your primary coverage. In this case, the employer health plan becomes secondary and will expect Medicare to pay first.
You must also enroll in Medicare if you have health coverage through COBRA. This is because continuation coverage does not count as active employment no matter the employer size.
When You’ll Be Automatically Enrolled in Medicare
If you are already receiving Social Security benefits, the Social Security Administration (SSA) will automatically enroll you in Original Medicare. This happens three months before you turn age 65.
If you wish to delay Part B, you must follow the instructions on the back of your Medicare card to opt out. Once the SSA has received your request, they will mail you a replacement card showing you only have Part A coverage.
