Medicare: Should I enroll if I have employer insurance?
People working for a company that offers insurance may not need to sign up for Original Medicare when they reach 65, but certain exceptions may apply.
Original Medicare (Parts A and B) becomes available to people when they reach the age of 65. Most people can sign up in a window of time that opens 3 months before and closes 3 months after the month their 65th birthday. This is called the Initial Enrollment Period.
People still working at the age of 65 with employer health benefits may not need to sign up during the Initial Enrollment Period. They may qualify for a special enrollment period if they have qualifying insurance coverage from work.
Glossary of Medicare terms
We may use a few terms in this article that can be helpful to understand when selecting the best insurance plan:
Out-of-pocket costs: An out-of-pocket cost is the amount a person must pay for medical care when Medicare does not pay the total cost or offer coverage. These costs can include deductibles, coinsurance, copayments, and premiums.
Deductible: This is an annual amount a person must spend out of pocket within a certain period before an insurer starts to fund their treatments.
Coinsurance: This is the percentage of treatment costs that a person must self-fund. For Medicare Part B, this is 20%.
Copayment: This is a fixed dollar amount a person with insurance pays when receiving certain treatments. For Medicare, this usually applies to prescription drugs.
Enrolling in Medicare with employer insurance
This article originally appeared on Medical News Today
The time when a person needs to sign up for Medicare coverage can be different if they have employer insurance or a spouse with employer insurance.
Original Medicare (Parts A and B) requires the majority of people to sign up during the Initial Enrollment Period which spans from 3 months before a person’s 65th birthday to 3 months after the month their birthday for a total of 7 months.
A person will also typically need to sign up for Part D shortly after signing up for Part B. Part D covers prescription drugs.
Learn more about Original Medicare.
Part A
Part A covers hospital stays.
A person with employer insurance will still need to sign up for Part A when they turn 65 if they will need to pay a monthly premium. Most people will not need to pay a premium, so they can sign up at a later time if they choose.
To qualify for premium-free Medicare Part A, a person needs to fit one of the following criteria:
they worked for at least 40 quarters (10 years) prior to turning 65
they have a spouse who worked for the above duration
they received Medicare prior to the age of 65
A person should check with their human resource department or insurance representative if they have any concerns about signing up for Part A when they turn 65.
Learn more about Medicare Part A.
Part B
Part B covers outpatient services and care, as well as some preventive services.
If an employer offers insurance, a person will typically not need to sign up for Part B during their Initial Enrollment Period.
Once they lose coverage either through termination of employment, retirement, or an employer no longer offering an insurance plan, they will have a special enrollment period for 8 months following the termination of coverage.
Failure to sign up during the special enrollment period will likely result in an increasing penalty for each month they do not sign up for Part B from the time they became eligible. The penalty applies to each month’s premium, increases with each delayed month, and never goes away.
In 2024, the standard monthly Part B premium is $174.70.
The late penalty fee is an extra 10% for each month a person did not sign up for Part B but could have.
Learn more about Medicare Part B.
Part D
If an employer offers creditable drug coverage, a person and their spouse may not need to enroll in Part D during the Initial Enrollment Period. Creditable coverage means that a private plan offers comparable benefits to Medicare Part D.
A person will typically need to sign up for Part D within 63 days of termination of creditable drug coverage due to loss of employment, changes in coverage, or retirement.
Similar to Part B, if a person does not sign up during their Initial Enrollment Period or a Special Enrollment Period, such as after retiring, they will pay a higher monthly premium for every month they delay getting coverage.
A person should discuss their drug coverage with their drug plan provider to determine if they qualify to wait to sign up for Part D.
Learn more about Medicare Part D.
What it means for benefits
If a person’s employment offers health insurance with drug coverage, a person can typically stay enrolled in their employer’s care plan until they retire, stop working for any reason, or their healthcare coverage changes or ends.
The same extension applies to married partners as well.
Once a person’s employment benefits change, they will have 8 months to sign up for Original Medicare to avoid penalties.
A company’s healthcare representative should be able to help a person understand if they qualify to wait to get Medicare and when they need to sign up.
Medicare eligibility requirements
The majority of people can sign up for Medicare when they turn 65 years old.
Other eligibility requirements include being a United States citizen or a lawful resident of the U.S. for at least 5 years.
Individuals may be eligible for Medicare before they turn 65 years old if they have received Social Security Disability Insurance (SSDI) for 24 months. They may also qualify early if they have end stage renal disease (ESRD) or amyotrophic lateral sclerosis (ALS).
Things to consider
The major concern about not signing up for Medicare during the Initial Enrollment Period is the penalty on monthly premiums. For example, the penalties for both Part B and Part D continue to increase and will not go away for the duration of coverage.
A person should discuss their employee benefits with a qualified representative at their company. The representative should be able to guide the person as to when they need to sign up based on their current healthcare coverage.
Most people with employer health benefits will qualify for a Special Enrollment Period once they retire or otherwise lose their benefits.
Read more about Special Enrollment Periods.
Frequently asked questions
Do I need Medicare Part B if I have insurance through my employer?
Generally, no. A person with coverage through their employer will likely qualify for a Special Enrollment Period, allowing them to sign up after their employment status or benefits change.
However, a person should check with the insurance representative at their workplace to make sure they qualify to not sign up at age 65.
Can I have Medicare and employer insurance at the same time?
A person should check with their insurance representative at their place of employment. They can answer specific questions if the employer offers plans that can work with Medicare or if they offer creditable drug coverage options.
Some insurance providers allow for a person to have more than one type of insurance. If this is the case, then an individual can sign up for Original Medicare when they reach 65 years of age.
What happens if you do not enroll in Medicare Part A at 65?
Many people will not have an issue if they delay signing up for Part A at 65. People who work for at least 40 quarters (10 years) generally do not need to pay a monthly premium and will not have a penalty if they do not sign up during their Initial Enrollment Period.
A person should contact Medicare directly by calling 800-633-4227 (TTY: 877-486-2048) for answers to specific questions about when to sign up for Part A and whether they will be required to pay a monthly premium.
Medicare resources
For more resources to help guide you through the complex world of medical insurance, visit our Medicare hub.
Summary
Many people still working at age 65 will not need to sign up for Medicare when they become eligible as long as their employer offers creditable insurance.
Once their employment ends or their benefits change, they will have 8 months to sign up for Original Medicare. They will also typically need to sign up for Part D within 2 months of ending creditable drug coverage.
A person should discuss their unique situation with a representative at their company to determine if they should sign up for Medicare when they turn 65.
They may also contact Medicare directly by calling 800-633-4227 (TTY: 877-486-2048) to discuss their situation and ask specific questions.
View the original article on Medical News Today
