Should I Get Part B If I’m Working Past 65?

Published by: Medicare Made Clear

If you’re planning to work past 65, or plan to remain on your spouse’s employer plan, you may be considering whether or not you should still enroll in Medicare. You will still have an Initial Enrollment Period when you turn 65, but depending on the health coverage you currently have, you may also be able to delay enrollment.

Many people turning 65 who have employer coverage through an employer or spouse often choose to still enroll in Medicare Part A at 65 as it’s usually premium-free, so we won’t focus on that in this blog. It is important to note, however, that enrolling in Part A impacts your health savings account (HSA) if you have one. Watch the video below to learn how Medicare and HSAs work.

Video transcript

Blue text appears on a white background as mellow music plays.

The text is replaced with the UnitedHealthcare logo.

ON SCREEN TEXT: Medicare Made Clear^Ⓡby UnitedHealthcare^Ⓡ

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Now, white and blue text scrolls onto contrasting word balloons on a light blue background.

ON SCREEN TEXT: Medicare

Conversations

ON SCREEN TEXT: Working past 65...

Phil Moeller, in a suit, addresses the camera in a chair on a white and stippled backdrop.

A table next to him holds books, a coffee, mug, and an abstract sculpture.

Blue text on the upper right displays his name and title, and smaller "Medicare Made Clear" logo appears in the lower right and remains onscreen for the duration.

ON SCREEN TEXT: Phil Moeller, Author and Medicare Expert

ON SCREEN TEXT: Medicare

Made Clear by UnitedHealthcare

PHIL: I'm Phil Moeller. Thanks for spending a few minutes with me today.

The words "Health Savings Account" appears in a blue circle and blue text floats next to it.

OPT: Health Savings Account

ON SCREEN TEXT: "What happens to your health savings account (HSA) when enrolling in Medicare?"

Phil speaks to the camera.

PHIL: If you have a high deductible plan, many employers will help you set up a Health Savings Account to help you deal with those expenses in the deductible phase of your plan.

Three circles, colored in green, blue, and blue stippling, slide onscreen bearing text as Phil speaks.

ON SCREEN TEXT: High Deductible Plan

ON SCREEN TEXT: Health Savings Account

ON SCREEN TEXT: Deductible

Phil continues speaking from the chair.

PHIL: HSAs are funded with pre-tax dollars.

The phrase "Health Savings Account" floats in a blue circle on the top of the screen.

Below it, a building and woman icon appear left to right.

Dollar signs float upward from the building and woman into the HSA circle.

PHIL: Usually your employer puts in some, and you can put in the rest up to a specified annual limit that is set and changed every year by the IRS.

As Phil speaks, the icons slide downward, leaving the HSA circle. A dollar sign in a circle, encased in a dotted line, appears to the left.

The label "Pre-tax" appears underneath it.

It moves quickly into the HSA circle and disappears. Another stippled circle labeled "Qualified Health Expense" appears to the right. The dollar sign now moves from the HSA circle toward the stippled circle and floats over it.

ON SCREEN TEXT: Pre-tax

ON SCREEN TEXT: Qualified Health Expense

PHIL: Not only can you fund it with pre-tax dollars, but you can spend those dollars on any qualified health expense, and you will not incur a taxable event when you spend the money.

Phil speaks to the camera.

PHIL: So HSAs can be a great vehicle because they're rare in that they're funded with pre-tax dollars, but when you spend the money out of the account, it's not a taxable event.

So it's tax-free going in, tax-free going out.

It can be a great tool, and the other nice thing about HSAs is that if you have unspent monies in an HSA, you can carry them over from year to year.

Blue dates appear under bullet points spanning the years 2019 to 2023.

The HSA circle slides rightward over the bullet points, connecting each of them with a thick blue line.

ON SCREEN TEXT: Health Savings Account

2019 2020 2021 2022 2023

PHIL: So you can build up some pretty big balances in an HSA, and I've actually advised people in some settings to not use their HSA.

He speaks to the camera.

PHIL: Just use it almost as a retirement vehicle.

Build up big balances in an HSA so when you do retire, you can spend those balances tax-free on any qualified expense...

Blue circles labeled "HSA" and "Qualified Health Expense" hover onscreen.

A dollar sign labeled "Tax Free" passes between them.

ON SCREEN TEXT: Health Savings Account

ON SCREEN TEXT: Tax Free

ON SCREEN TEXT: Qualified Health Expense

Now another circle labeled "Medicare Premiums" appears, and another dollar sign with the "Tax Free" label passes to it from the HSA circle.

ON SCREEN TEXT: Medicare Premiums

ON SCREEN TEXT: Tax Free

PHIL: Including, by the way, Medicare premiums, which are a qualified medical expense as you retire.

Phil speaks to the camera, and then two large circles with labels appear next to a each other. A "+" appears between them and is quickly marked out with a red diagonal line.

ON SCREEN TEXT: Health Savings Account

ON SCREEN TEXT: Medicare

PHIL: So HSAs can be terrific. However, there's a wrinkle in that HSAs are not compatible with Medicare.

The circles rotate, with the "Medicare" circle above the "HSA" one.

A line slides onscreen and forks, forming a separate path into each of the circles.

A dollar sign moves along the path into the upper circle, and another dollar sign exits the lower circle.

The upper circle moves offscreen, leaving the "HSA" circle with a line running through it.

PHIL: So if you have Medicare, you are no longer allowed to contribute to an HSA.

You can use the funds in the account, but you can't contribute new funds to the account.

And your response may be, "Well, that's fine, because I'm gonna continue to work, and I'm gonna continue to use my HSA, and I'm not filing for Medicare."

Phil speaks in profile.

However, a lot of people, as they get: older, especially when they reach the latest claiming age of 70 for Social Security, it really behooves them to file for Social Security.

White text appears on a large blue circle.

ON SCREEN TEXT: Social Security

A graphic representing a completed form appears to the right of the circle.

It slides downward, and now a smaller circle labeled "Medicare" appears out of the "Social Security" circle, connected by a chain.

PHIL: When you file for Social Security, by law you must receive Part A of Medicare.

You can't avoid it. If you want to get Social Security benefits, you have to be enrolled in Part A.

The larger circle shrinks and is overlapped by the Medicare circle.

Then an "HSA" circle appears to its right enclosed by a thick blue border.

A dollar sign bounces off the border.

PHIL: If you're enrolled in Part A, it means you can't continue making contributions to an HSA.

Phil speaks to the camera.

PHIL: People rarely understand this.

I get a lot of questions from people who simply are surprised when they run into this roadblock, and so I'm telling you today that there is a roadblock you should be concerned about,
so you shouldn't unintentionally enroll in Part A.

The lower right corner of the screen rolls up like a paper unfolding, revealing blue warning text next to Phil.

ON SCREEN TEXT: Be aware of unintentionally enrolling in Part A

PHIL: And in some cases, it can influence the timing of when you do apply for Social Security.

However, I don't know of any situation when you're better off not taking Social Security benefits and using the benefits of contributing to an HSA,
especially if you're waiting until age 70 to file.

You should just file for Social Security and understand that that means you won't be able to continue contributing to an HSA.

An orange question mark and blue text appears on screen. Phil then speaks to the camera.

ON SCREEN TEXT: "What if I still have questions?"

PHIL: I'd really appreciate you spending a little time with me today.

I hoped I helped answer some of your Medicare questions.

I realize you may have lots of other questions. Medicare can be pretty complicated.

A white word balloon featuring blue text unfolds to Phil's right.

ON SCREEN TEXT: MedicareMadeClear.com

PHIL: MedicareMadeClear.com provides lots of answers to your basic questions, so if you still have them, I urge you to go there and see if you can get the answers you need.

Thanks again for spending time with me today.

The scene fades to white. The blue UnitedHealthcare logo and fine print appear onscreen.

The logo slides upward, replaced by the Medicare Made Clear logo.

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Part B is different. Unlike Part A, Medicare Part B has a monthly premium, which can cost $148.50 to $504.90 depending on income. It has a late enrollment penalty for anybody who enrolls without qualifying for a Special Enrollment Period. That penalty is an additional 10 percent of the Part B premium for each 12-month period you delay enrollment. Learn more about this and other late enrollment penalties.

Now, let’s look more closely at enrolling in Medicare Part B when working past 65.

When You Must Enroll in Medicare Part B

You may be required to get Medicare Part B even when you’re still working. There are two situations in which you must get Part B when you turn 65.

If your employer has fewer than 20 employees.

If you’re covered by a spouse’s employer, and the employer requires covered dependents to enroll in Medicare when they turn 65.

If you’re not married but living in a domestic partnership and are covered by your partner’s employer health insurance.

In each of the above cases, you won’t qualify for a Special Enrollment Period and cannot delay enrolling without incurring late enrollment penalties.

Additionally, some employer plans will automatically become secondary to Medicare when you become eligible. In this case, Medicare becomes your primary insurance and would pay first. If you do not have Medicare and need health care, you would essentially have almost no coverage from your employer plan. One such plan that operates like this is the military’s TriCare for Life.

When You Should Consider Enrolling in Medicare Part B

If you qualify to delay enrolling in Medicare, deciding to do so is a personal choice.

Some may choose to delay, and for others, it may still be a good fit for your health and lifestyle to enroll in Part B. Consider the following when trying to decide whether to enroll in Part B or delay while still working:

Is Medicare less expensive than your current health insurance?
Does Medicare offer better coverage than your current health insurance?
Do you want to keep your current insurance but also take advantage of Medicare benefits
Do you want to enroll in either a Medigap or Medicare Advantage plan?
Is your prescription drug coverage considered “creditable” by Medicare?

Answering the above questions can help you decide whether or not to delay enrollment. It’s important to carefully consider the last item regarding prescription drug coverage. While most employer coverage is considered creditable, you should still verify if it is or could end up facing a late enrollment penalty for Medicare Part D.

I Want to Delay Part B

If you qualify and decide you want to delay enrolling in Medicare Part B, you should not face any late enrollment penalties for Part B. When you lose your employer coverage, you will get an 8-month Special Enrollment Period during which to enroll in Medicare Part B, and Part A if you haven’t done so already.

You’ll also be able to enroll in a Medicare Advantage (Part C) plan or Part D prescription drug plan in the first two months of this period. Note: if you enroll in Part C or Part D after the first two months of your Special Enrollment Period, you may face late enrollment penalties for Part D. You’ll want to also ensure you provide proof of creditable coverage when you enroll in Part D.

You do not need to notify Medicare that you will be delaying Part B unless you are already receiving Social Security or Railroad Retirement Board benefits.

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About the Author

Medicare Made Clear

Providing simple information and clear answers about Medicare insurance plans and choices for current and future beneficiaries, retirees, caregivers and health care providers.