If you’re nearing age 65, working, and eligible for employer-provided health benefits, you may be wondering how it all fits with Medicare. What better person to ask than a licensed and highly experienced insurance agent who specializes in Medicare? Guest writer Dyan Collette answers some of the most common questions that surround applying for Medicare benefits while also qualifying for health insurance coverage through your job.
Hi, my name is Dyan Collette. I have worked as a broker in the Medicare market for 17 years, helping people make the best, most appropriate decisions regarding their health insurance. Being a broker simply means that I work with multiple insurance carriers and am able to offer many insurance options to my clients.
Unless you are already on Social Security Disability, you will become eligible for Medicare at age 65. Some of the most common questions I receive from clients are about what to do if they plan to continue working after their 65th birthday.
What happens if I’m still working at age 65? Do I need to sign up for Medicare? Will there be a late enrollment penalty if I don’t? What exactly do I NEED to do and when?
Let’s dive in and answer these questions.
If you are still working at age 65 and receiving employer healthcare coverage, then you will in most cases be able to delay your Medicare enrollment, stay on your employer coverage and keep things the same. However, it’s recommended to talk with an insurance/Medicare consultant to compare your employer plan benefits with Medicare coverage. I see a wide range of employer health plan coverages. For example, some plans have low monthly premium costs for participants, and some have high premium costs. Some employer plans offer rich benefits with low deductibles, while others have high deductibles with little to no preventative care benefits.
There are other questions to consider when deciding between keeping employer coverage or moving to Medicare. Do you have younger dependents on your employer plan who will lose health coverage if you transition to Medicare right away? Do you have major surgery coming up that would cost you less on Medicare?
Employer health coverage with a group that includes at least 20 people is considered “credible coverage”. This just means that if you have credible employer coverage, you can remain on it without paying any late enrollment penalties to Medicare.
After consideration, if your best option is to remain on employer coverage, you will not need to do anything until you are ready to activate your Medicare. When you’re ready to move to Medicare, there is a government form that your employer will need to sign on your behalf stating that you’ve had employer coverage since age 65. Submitting this form will let Medicare know that you had credible coverage and will make sure that you aren’t charged a late enrollment penalty.
My recommendation is to start the process of transitioning to Medicare at least 2-3 months prior to the date your employer coverage will end. This will allow enough time to submit your paperwork in order to receive the Medicare start date you desire. Giving yourself enough time to transition to Medicare also ensures that you will not have any breaks in coverage.
Once you are 65, you can move from employer coverage to Medicare at any time of the year. Your timing doesn’t need to correspond with your company’s open enrollment timeframe or Medicare’s annual enrollment window. I always tell clients that they are the boss on when to make the move from employer coverage to Medicare.
Sometimes I encounter a very cautious individual who considers holding both employer coverage and Medicare coverage at the same time. While it is permitted to sign up for Part A of Medicare in combination with employer coverage, it is NOT recommended to have Part B in combination with employer coverage. This is because employer coverage and Medicare do not coordinate benefits. In this situation, it can often be unpredictable in terms of which entity is responsible for paying a claim, which can become extremely frustrating and even scary.
So what happens if you continue to work and decide that switching to Medicare is your best option? You can still work! Medicare enrollment doesn’t have anything to do with your employment status. If you decide to move to Medicare, you will simply let your employer know which date to drop you from their health plan.
Once you do decide to move to Medicare, it’s wise to work with an agent to select an appropriate Medicare Supplement or Medicare Advantage plan. Working with an insurance agent is complimentary and comes with benefits that include personalizing the enrollment process, having a liaison between you and the company, and having someone with experience to turn to for questions. There are SO many insurance options in the Medicare world that it can be overwhelming to select a plan on your own. Every individual’s situation is unique, and what works for one person may not work for another.
If you are considering Medicare enrollment and live in Arizona, feel free to contact me with questions at firstname.lastname@example.org or call 480-432-4749.
Important Note: Sonmore Financial LLC and Dyan Collette LLC are not affiliated
and operate independently.
Advisory services are offered through Sonmore Financial LLC, an Investment Advisor in the State of Arizona. The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information and should not be considered a solicitation for the purchase or sale of any security or financial product.