Medicare and working past 65

For those over 65 planning to continue working, there are many questions to ask when deciding to stick with your employer’s healthcare or opt for Medicare. Not asking the right questions or learning about potential Medicare mistakes to avoid may leave you paying more for health insurance in the long run due to penalties that may be incurred. 

There are many things to take into account before deciding which health insurance coverage to use. Asking questions will help you make the most informed decision. Here are some questions you should ask about your employer’s health coverage:

Is the drug coverage “creditable?”

If your employer’s drug coverage is not creditable, you may not be eligible to delay Medicare Part D coverage.  According to the Centers for Medicare & Medicaid Services, ‘Creditable prescription drug coverage’ is coverage that meets Medicare’s minimum standards since it is expected to pay, on average, at least as much as Medicare’s standard prescription drug coverage.

Is it a group health plan as defined by the IRS?

This question is particularly important for those who are self-employed or receive health coverage at a company that doesn’t offer it to every employee.

If the answer to this question is no, you may have to sign up for Medicare during your Initial Enrollment Period (IEP) to avoid late penalties.

Will this insurance be considered my primary or secondary insurance?

For those who work at a company with 20 or less employees, Medicare will be the primary insurance if you sign up for Medicare. In the State of Washington as long as you do not sign up for Medicare A or B, your group plan will continue to pay the same until you retire. If you sign up for Part A hospital insurance, then Medicare will pay primary and your group plan secondary. This is also true if you’re covered by a spouse’s employer insurance and there are 20 or less employees at the company.

If your company (or spouse’s) has more than 20 employees, the group insurance is primary and Medicare pays secondary. 

If you are planning to stay on your employer-based plan and delay enrolling in Part B, check with your HR department to confirm which plan is the primary payer. 

If you’re unsure about anything regarding your health insurance, it’s always best to ask about it. You can find many answers to your questions online, by talking with a Medicare expert or by discussing it with your employer’s benefits specialist.

Is It Mandatory to Sign Up for Medicare at Age 65?

Signing up for Medicare is not mandatory if you are still working at age 65. As long as you are on a group sponsored plan in the State of WA you can delay enrollment until retirement. You can sign up for Part A hospital if you do not have an HSA that you want to continue to contributing money to on a pre-tax basis. 

However, even if your company offers health insurance, you or your spouse can choose to enroll in Medicare if it makes more sense for your financial and current health situation.

For those who have decided to continue working after 65, you should understand how your employer’s health insurance will work with Medicare. Knowing if you should delay enrolling in Part A, B or C is the first step to avoiding costly Medicare mistakes.

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