SHOULD I SIGN UP FOR MEDICARE AT AGE 65 IF I'M STILL WORKING?
For individuals aged 65 and older who are still employed and receiving health insurance through their workplace, the question of whether to enroll in Medicare can be perplexing. The good news is that if your company employs more than 20 people and you have work-based health insurance, you do not need to enroll in Medicare until your existing health insurance expires.
When you stop working or if your employer discontinues its group insurance plan, you have an eight-month window to sign up for Medicare. This is true regardless of whether you have COBRA or another health insurance plan. If you do enroll in Medicare while still having work-based insurance, your work insurance will pay first, and Medicare will pay second.
However, if you work for a company with fewer than 20 employees, the situation changes. You will need to contact your company's HR department for specifics about your health insurance program. In many cases, smaller employers require that individuals aged 65 and older enroll in Medicare to continue receiving company health insurance benefits. For these smaller companies, Medicare pays first, and work-based insurance pays second.
If you turn 65 and do not have work-based health insurance, it is crucial to enroll in Medicare within your seven-month initial enrollment period. Failing to do so will result in a penalty that will make your premium more expensive. Answering a few quick questions on the official Medicare website can help you determine if and when you need to enroll in Medicare.
For those who want to completely opt out of Medicare Part A, it is possible, but it comes with significant consequences. You will have to give up your Social Security benefits entirely and pay back any benefits that you have already received. This is a critical decision that should not be taken lightly.
The penalties for late Medicare enrollment manifest as increased monthly premiums. If you qualify for premium-free Medicare Part A, there is no penalty for late enrollment, though you will have to wait until the General Enrollment Period from January to March to join. If you need to pay for Part A and join after your initial enrollment period, you will pay 10% more for your monthly premium for twice as many years as you delayed enrollment.
Late enrollment in Medicare Part B can be even more costly, and the penalty is permanent. If you decide to enroll in Part B late, you can only do so during the General Enrollment Period, and you will pay an extra 10% per month for every year you delayed enrolling. This penalty will remain for as long as you receive Medicare benefits.
For Part D, you can delay enrollment if you have existing prescription drug coverage, but penalties start accruing after 63 days without coverage. You will pay 1% more in monthly premiums for every month you delay enrolling in Part D. After you join a Medicare plan, you will receive a notice explaining any possible penalties. If you disagree with any penalties, you can file an appeal within 60 days of the date on the notice.
Fortunately, you can change your Medicare plan after you have enrolled. During the Medicare Open Enrollment Period (OEP), also known as the Annual Election Period (AEP), you can switch from a Medicare Parts A & B plan to a Part C plan, or vice versa. You can also switch Part C plans or join, drop, or switch to a Part D prescription drug plan. The Open Enrollment Period occurs every year between October 15 and December 7, with updated coverage starting on January 1.
Additionally, changes can be made during Special Enrollment Periods (SPE), which occur after certain life events, such as moving or losing other coverage. You have the option to switch to another plan if your current plan changes its contract with Medicare. You can enroll in a new plan within 60 days of the life event.
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