Many people enroll in Medicare around age 65. However, many others plan to keep working past 65. If this sounds like you, you may wonder if this is possible with Medicare.
The good news is that you can apply for Medicare whilst still working. In some cases, you can even delay Medicare enrollment altogether. However, your exact enrollment process will depend on a few different factors.
Medicare Enrollment Basics
As mentioned above, most people sign up for Medicare at age 65. More specifically, people typically apply during their 7-month-long Initial Enrollment Period. This period begins three months before your 65th birthday month and ends three months later. During this time, you sign up for Medicare Part A and Part B through Social Security either online, over the phone, or in person.
In most cases, if you miss this enrollment period, you will face financial penalties if you decide to sign up later. Fortunately, you can avoid these penalties if you have creditable work insurance.
Medicare Enrollment With Employer Coverage
As mentioned above, you can sign up for Medicare even if you’re still working. How Medicare will coordinate with your employer insurance depends on the size of the company you work for, whether large or small.
Large Employer Insurance
If you actively work for an employer with 20 or more employees, Medicare considers your company “large.” This means you can delay all parts of Medicare past 65 without financial penalties if you sign up later. So, if you’re happy with your employer insurance and don’t want to transition to Medicare yet, you can keep what you have.
However, you do have some other options as well. Most people qualify for premium-free Medicare Part A due to having enough work credits. Odds are you do too, so you may consider signing up for Medicare Part A to have extra inpatient hospital coverage if you ever need it. In this case, your employer insurance would be primary, and Medicare would be secondary.
You have another option as well. In some cases, Medicare insurance can be more cost-effective compared to employer coverage. If this is the case for you, you can choose to leave your employer altogether and sign up for Medicare insurance and other supplemental plans during your IEP.
So, when you have large employer insurance based on active employment, you have a few different options to chew over.
Small Employer Insurance
If you work for a company with less than 20 employees, Medicare considers your employer “small.” In other words, Medicare does not deem your employer coverage creditable. This means you will want to sign up for Medicare Part A and Part B during your IEP to avoid penalties. In this case, Medicare would be primary, and your work insurance would be secondary.
Additionally, you will likely want to sign up for a Medicare Part D plan (prescription drug coverage) as well to avoid penalties. However, if your employer insurance includes creditable coverage for retail prescription medications, you do not have to sign up for a Part D plan. If you’re unsure if your insurance counts as creditable coverage for Part D, you should be able to ask your HR department for verification.
Many people sign up for Medicare during their IEP around age 65 (Medicare eligibility age). However, if you want to keep working past 65, you can apply for Medicare while still working. Medicare coordinates with employer insurance in different ways depending on the size of the company you work for.
On the one hand, with large employer insurance, you have various options and can even delay Medicare. On the other hand, with small employer insurance, you will want to sign up for Medicare during your IEP, so you don’t have any penalties.
It can sometimes be overwhelming to understand the ins and outs of Medicare and employer insurance. So, be sure to do your research ahead of time, so you go into this process with knowledge and confidence!