Medicare Update: Working Past 65 and Your Initial Medicare Enrollment

Let’s look at what options you have if you continue to work past 65 and your initial enrollment into medicare. Stay Tuned.

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Medicare Update: Working Past 65

Deciding whether to enroll into Medicare or to stay on your group health plan is an important decision when you are turning 65 and become eligible for medicare benefits. Lets go to my desktop and look at the 4 most common scenarios I run into with people who are continuing to work past 65.

20 or More Employee’s

If you or your spouse are with a company that has 20 or more employees then your group plan will pay first and Medicare will pay secondary. This means that your group plan will pay the majority of your bill’s and medicare would pay little or sometimes nothing.

Now since Medicare is not paying much, should you enroll into it? Medicare has two major parts. Part A or hospital insurance and Part B or medical insurance. Part A is usually free so even if you do have work coverage you should consider enroll into Part A. Because there is a chance it may pick up some of the bill your group plan does not.

There is one situation where you do not want to enroll into Part A and that is if you have a High Deductible Health Plan with a Health Savings account. This is because you cannot be enrolled in Medicare Part A and a Health savings account at the same time, so in this situation you would want delay enrolling into Part A of Medicare until you retire.

What about Part B of Medicare. Well part B or medicare does have a premium. And for the majority of people it is $134 in 2017. Now most people that work in a company with 20 or more employees usually decide not to enroll into Part B until they retire so they do not have to pay the monthly premium for Part B. When they finally do decide to enroll into Part B they will not have to pay the Part B late enrollment penalty if they can prove that they had creditable health insurance before they retired.

Now if your work insurance is expensive or the coverage is not as good as Medicare then you may want to look at singing up for medicare instead of keeping your employer coverage. You just have to weigh the cost and benefits of both. Just make sure to take into account all the costs of medicare. These include Part A, Part B, a medicare supplement or Advantage Plan, and also Part D or your drug coverage. Also make sure to consider your spouse’s coverage when comparing the two.

Most often your Part D drug coverage cost and finding health insurance for your younger spouse are the two most important factors when comparing your employer coverage to medicare, and always make sure to work with a medicare agent like myself and your Benefit or HR department at work so that you can make the best decision.

20 or Less Employee’s

If you or your spouse are with a company that has less then 20 employees then Medicare will pay first and your group plan will pay secondary. You most likely will have to enroll into Part B before your employer insurance pays anything. Because If you don't enroll, your employer's plan can refuse to cover you for services that Medicare would have covered. That means that you may have to pay for those services out of your own pocket.

Now it is important to ask your employer's insurance company what kind of gap coverage it offers as a secondary payer to Medicare. Smaller plans often limit the choice of providers. Now unless your younger spouse needs coverage you are probably better off buying a private Medigap plan to cover what medicare does not. But again you would need to compare the cost and benefits of both, and work with your benefits or HR department and an agent to go through all your options.

Cobra and Retiree Coverage:

With cobra and Retiree coverage medicare will pay first and these two pay secondary. Retiree health plans and Cobra differ on the amount of gap coverage they provide after medicare pays first, so much like with plans with 20 or less employees it's a good idea to check with the benefits administrator to see what would be covered by the plan after medicare pays there portion. Again, you may be better off with a Medigap plan instead of Cobra and Retiree coverage, but you will need to weigh you options.

Conclusion:

Deciding what to do with your health coverage if you continue to work past 65 is different for everyone and I really just covered some of the basics. Make sure to work closely with your employer and a medicare agent to decide what would be best for you. Now if you want to learn about how medicare works make sure to check out my video about turning 65 and enrolling into medicare for the first time. As as always please like, comment, and subscribe as soon as this video ends so we can help more people.

Andrew Walsh