Turning 65 is often synonymous with enrolling in Medicare, but for millions who continue to work beyond this milestone, the rules around Medicare enrollment are less clear. While it’s easy to assume the process is straightforward, understanding how Medicare coordinates with existing employer health insurance is essential for avoiding costly mistakes.
Delaying Medicare Enrollment: The Benefits of Staying with Employer Coverage
For those still employed past the age of 65, the decision to enroll in Medicare isn’t always immediate. If you are covered by a health plan through a large employer (typically 20 or more employees), you are not required to sign up for Medicare Part B right away. According to the Centers for Medicare & Medicaid Services (CMS), this is because your employer’s insurance is considered your primary coverage. As long as your job-based insurance is active, you can delay enrolling in Part B without incurring a late enrollment penalty.
Experts recommend signing up for Medicare Part A as soon as you become eligible. Part A is generally free and provides hospital insurance coverage, which can supplement your existing plan. However, Part B, which covers outpatient services like doctor visits, can be delayed if you are still working and have employer coverage. It’s crucial, however, to carefully track your enrollment windows, as waiting too long without proper planning can lead to penalties when you do eventually sign up.
The Special Enrollment Period: What Happens When You Retire?
Once you retire or lose employer coverage, the clock starts ticking. According to Medicare experts, you have an eight-month Special Enrollment Period (SEP) to sign up for Medicare Part B without facing any late penalties. This SEP begins the month you lose employer health coverage or retire, giving you a critical timeframe to ensure your healthcare coverage remains uninterrupted.
It’s important to note that employer health plans like COBRA or retiree coverage do not count as “active” employer insurance. When you retire or leave your job, Medicare becomes your primary coverage. Failing to sign up for Part B during your SEP could result in a permanent late-enrollment penalty, which increases your monthly premium for as long as you have Medicare.
Moreover, if you work for a small company with fewer than 20 employees, Medicare will automatically become your primary insurance when you turn 65, even if you continue with your employer’s health plan. In these cases, enrolling in both Part A and Part B immediately is advisable to avoid coverage gaps or unexpected costs.
While continuing to work after 65 offers some flexibility with Medicare enrollment, the key is timing. By staying informed and planning ahead, you can ensure you’re never without proper health coverage and avoid unnecessary penalties.
