For most people, this is the best time to sign up for Medicare. Signing up for Medicare coverage during your Initial Enrollment Period can help you avoid late enrollment penalties.
2. You May Be Able to Delay Medicare Part B
Most people get Medicare Part A (hospital insurance) premium-free because they or a spouse worked and paid taxes for at least 10 years. Part B (medical insurance) has a monthly premium that for 2021 is $148.50 to $504.90, depending on income.
You may be able or want to delay signing up for Part B if you have other health care coverage, such as through an employer or union. You must qualify for a Special Enrollment Period to avoid a late enrollment penalty if you delay Part B. If you have coverage through an employer, you may also choose to delay enrolling in Part A, especially if you still want to contribute to a health savings account (HSA).
Working Past 65: When You May Be Able to Delay Medicare
If you work for an employer with 20 or more employees, you have options when it comes to Medicare enrollment. Medicare expert Phil Moeller discusses this situation and some important things to keep in mind when choosing whether to enroll in or delay Medicare.
Phil Moeller - Large Employers
On-screen text: Medicare Conversations - Working Past 65…
On-screen text: My employer has 20 or more employees, what about Medicare?
On-screen text: Phil Moeller, Author and Medicare Expert
Hi, I'm Phil Moeller. I write articles and books about retirement and health care, and I've written a lot of pieces about Medicare.
When people approach 65 and decide to keep working, they have some important decisions to make about Medicare.
I'm going to talk today about the decisions you need to make when you work for a large employer with 20 or more employees.
Medicare rules in that situation, give you the right to do nothing if you choose.
But it also sets up a series of possible decisions, and I want to sort of talk about those today.
There are really three pathways here.
The first one, as I said, is you can keep your employer plan and you don't need to get Medicare.
The second approach is, you can keep your employer plan and you can also get Medicare, and there are some situations where that makes sense.
The third pathway is, well, you can get Medicare and you can drop your employer plan.
So, these are the three pathways. Let's talk about them in order.
On-screen text: I only want my employer plan.
So, when you decide that you're simply going to do nothing and keep your employer plan, there's one wrinkle I want to make sure you're aware of.
Even though your employer is obligated to continue offering you health coverage, including drug coverage, Medicare rules stipulate that your drug coverage in your employer plan has to be at least as good as a typical Medicare Part D plan.
If it is, fine, and your employer has to give you a statement that attests to this.
People don't know that their statement even exists, let alone they should ask for it. But your employer has a legal obligation to provide this.
It's a key piece of paper for you because if your plan is creditable, you're fine, but if your plan's not creditable, then you have to get a Part D plan.
Even though you're going to keep your employer coverage.
In that situation, you can get a Part D plan without having to also pay for Part B.
All you have to have is Part A, and you get a Part D plan, you keep your employer plan.
That's the most significant sort of implication of keeping your employer plan as far as Medicare is concerned.
On-screen text: I want Medicare and my employer plan.
The second situation is you decide, "Well, I think I want to keep my employer plan and I also want to get Medicare."
In that situation, you really need to pay attention to, what is Medicare going to give me or get for me that my employer plan is not going to cover?
Historically, people tended to just keep their employer plans and they didn't worry about getting Medicare when they turned 65.
However, employer plans have changed a lot in recent years.
Many people now have what are called high deductible health plans.
You may pay three, four thousand dollars or even more out of pocket before your employer health coverage starts helping you pay those bills.
In that case, it can make a lot of sense to get a Medicare plan, which can help pay that deductible for you.
Also, Medicare may cover some things that your employer plan doesn't.
In particular, a Medicare Advantage plan can cover health clubs, dental, hearing and also some vision coverage that your employer plan may or may not cover as well.
So, look at what your employer plan covers, see what you're exposed to in terms of cost and coverage features, and then you may decide that you actually want both.
On-screen text: I only want Medicare.
The third thing is, you look at your employer plan and you look at what Medicare offers and you say, "Well, that's pretty expensive to do both of these.
Maybe all I need is Medicare." And that's quite possible.
You need to understand what Medicare will cover and see what would happen to you, if you don't have that employer plan anymore.
In that case, you also need to pay attention to what happens to your family.
If your spouse and your children are insured on your employer plan, you probably want to think long and hard before you drop that employer plan.
Although, it's still possible that you and they could be better off if you dropped your employer plan and they went on a state insurance exchange and got their coverage.
Those are decisions that you can make.
One thing I will say is that, you don't want to wait too long to make these decisions and you also don't want to guess about what's going on. Because you can't make an informed decision if you're not informed, to say the least.
On-screen text: So, what’s the takeaway?
We've covered lots of ground today, so let's recap a bit.
If you work for a large employer with 20 or more employees, the employer must continue offering you health coverage.
You have three decisions: you're going to just keep your employer plan, you're going to get Medicare plus your employer plan, or you're going to drop your employer plan and just get Medicare.
All of these decisions should be based on information and knowledge about what's covered, what's not, what it costs.
That's information that you need to get from your employee benefits department and you need to get it before you turn 65.
Don't dawdle here. You really need to act on a timely basis to make sure you make informed Medicare decisions.
If you have any more questions, you can go to MedicareMadeClear.com and get additional information. Thanks so much for spending some time with me.
3. There Are Two Ways to Get Medicare
Medicare gives you two ways to get your benefits:
Original Medicare (Parts A & B), the traditional way
Medicare Advantage (Part C), an alternative to Original Medicare
Original Medicare is administered by the federal government. Medicare Advantage plans are offered by private insurance companies approved by Medicare. They must provide all the same benefits as Original Medicare Parts A and B. Many Medicare Advantage plans include additional benefits, such as coverage for prescription drugs, dental, vision, hearing, fitness and more.
4. Medicare Doesn’t Cover Prescription Drugs, Dental and More
Original Medicare doesn’t include coverage for prescription drugs and other health items. To get prescription drug coverage, you may either buy a standalone prescription drug plan (Part D) or choose a Medicare Advantage plan with included drug coverage.
Generally, you don’t need additional coverage if you choose a Medicare Advantage plan as most come with prescription drug coverage included.
5. Am I Required to Get Medicare?
Medicare is not required, but if you decide not to enroll at age 65 and do not qualify for a Special Enrollment Period, this could be costly. Medicare Parts A, B and D all have late enrollment penalties, and these can quickly add up. Take some time to think carefully and know all your options if you are considering not enrolling in Medicare. It’s usually a good idea to enroll at age 65 if you do not qualify for a Special Enrollment Period.