Turning 65 and Still Working: How to Navigate Medicare Enrollment

You've worked hard your entire career, and even though you've turned 65, you don't plan on retiring just yet. The good news is that you can still work past 65 while also getting Medicare coverage. However, there are some important things to know about how Medicare works when you decide to keep working into your retirement years.

Medicare Eligibility when You Turn 65

Once you turn 65, you become eligible for Medicare even if you continue working. There are a few parts of Medicare that provide different types of coverage:

·        Medicare Part A - Also called hospital insurance, Part A covers inpatient hospital stays, skilled nursing facility care, hospice care, and some home health care services. Most people automatically get Part A at age 65 or older without having to pay premiums since they or their spouse paid Medicare taxes while working. You can get automatically enrolled in Medicare with this option.

·        Medicare Part B - Also called medical insurance, Part B covers doctor visits, preventive care, medical equipment, lab tests, and other outpatient services. Unlike Part A, you do need to actively enroll in Part B when you turn 65 and pay a monthly premium.

·        Medicare Part D - This optional part of Medicare covers prescription drug coverage. Like Part B, you have to choose and enroll in a Part D prescription drug plan and pay premiums.

Should You Sign Up for Medicare if Still working past 65?

Just because you are eligible for Medicare when you turn 65 doesn't mean you are required to enroll right away if you have health insurance from an employer. In fact, it may be smart to delay Medicare enrollment in some cases.

Here are some things to consider when deciding whether to enroll in Medicare at 65 if still working:

·        If your employer has 20 or more employees, you can delay enrolling in any part of Medicare without penalty. The group health plan from your employer will be your primary coverage.

·        If your employer has less than 20 employees, you should enroll in Medicare Part A when first eligible since it is premium-free. However, you can delay enrolling in Medicare Part B and Part D without penalty to keep your employer coverage.

·        When you stop working or your employer coverage ends, you will have an 8-month Medicare enrollment period to sign up for Part B and Part D without facing any late penalties. This is called the Special Enrollment Period.

·        If your current coverage pays after Medicare pays, you may want to enroll in Medicare to make it the primary payer. Check with your employer's benefits administrator.

No matter your employer size, you can still enroll in Medicare Parts B and D when first eligible at 65. But this will make Medicare your primary insurance, meaning your employer plan will pay secondary.

Things to Know About Medicare Enrollment Period 

Here are some key things to understand about Medicare enrollment when you reach age 65 but continue working:

·        You have a 7-month Initial Enrollment Period to sign up starting 3 months before your 65th birthday month, including your birth month, and ending 3 months after.

·        If you miss signing up for Part B during your Initial Enrollment Period, you may have to pay a 10% late enrollment penalty for each year you wait to enroll.

·        You can only make changes to your Medicare coverage during the Open Enrollment Period each year from October 15 to December 7. So make your choices carefully.

·        If you enroll in a Medicare Advantage Plan instead of Original Medicare, you may not be able to change plans outside of Open Enrollment except under special circumstances.

·        Your employer health insurance may change once you reach age 65 and become Medicare-eligible. Talk to your plan administrator.

·        Cobra and retiree health coverage can coordinate with Medicare, so you don't need to cancel those plans when you enroll in Medicare.

Want to Delay Medicare? Medicare Coverage Options When Employed Past 65

As you approach your 65th birthday and Medicare eligibility while still working, you have a few options for your Medicare coverage:

Delay all parts of Medicare - If you have employer coverage through a company with 20+ employees, you can simply delay enrolling in parts of Medicare. Your employer plan will remain primary.

Enroll just in Part A - For smaller employers, you should sign up for premium-free Part A when first eligible at 65 to avoid penalties. Delay other parts.

Enroll in all parts of Medicare - You can choose to get Medicare Parts A and  B at 65 even if still working. Signing for Medicare Part A and Part B will make Medicare your primary coverage.

Get a Medicare Advantage Plan - Instead of Original Medicare, you need to sign into a Medicare Advantage Plan and Medicare Supplement to get your Medicare benefits. These are from private insurers.

Add a Part D Plan - To get prescription drug coverage, you can pick a standalone Part D Plan to go with Original Medicare or a Medicare Advantage Plan with built-in Part D coverage.

Avoid Medicare Enrollment Penalties

To avoid paying lifelong late enrollment penalties that raise your Medicare premium costs, make sure you understand the rules for your situation:

·        If your employer has fewer than 20 employees, sign up for Medicare Part A to avoid penalties.

·        Don't go more than 8 months without a Part D drug plan after your employer coverage ends or you'll face penalties.

·        Carefully track the deadlines for your Special Enrollment Period, Initial Enrollment Period, and General Enrollment Period.

·        If you miss signing up for Part B when first eligible, you'll pay 10% more for each 12-month period you delayed.

·        You can't enroll or switch your Medicare Advantage Plan outside of Open Enrollment except for limited reasons.

Get the Best Medicare Fit

As you weigh Medicare enrollment options when turning 65 but still working, think about what will provide the most seamless coordination between your employer insurance and Medicare:

·        Does your employer plan pay primary or secondary to Medicare?

·        What are the out-of-pocket costs, premiums, and benefits under each option?

·        Do your preferred doctors participate in the plan's network?

·        Does the coverage include your prescription medications?

·        Are extra benefits like dental, vision, hearing aids, or gym memberships included?

The best Medicare option will depend on your personal situation, health needs, what is in your health savings account, and budget. Shop around to find a plan that fits your needs today and in the future.

Reaching age 65 and Medicare eligibility can be confusing when you are still actively working. But taking the time to understand the rules and coordinate your benefits carefully can ensure you get affordable health coverage without gaps now and when you fully retire down the road.

FAQS about enrolling in Medicare when i turn 65

Do I need to enroll in Medicare when I turn 65?

It depends on your situation. If you’re still working and have health insurance through your employer, you may be able to delay enrolling in Medicare Part B without a penalty. However, if you don’t have other health coverage, you’ll want to sign up for Medicare during your initial enrollment period, which starts three months before the month you turn 65 and ends three months after. Otherwise, you may face late enrollment penalties and gaps in coverage.

How does Medicare work if I plan to keep working past age 65?

If you’re still working and have health insurance through your employer, you can choose to delay enrollment in Medicare Part B until you retire or lose your employer coverage. However, you should enroll in Medicare Part A at age 65, since it’s usually premium-free and can help pay for some hospital costs that your employer plan doesn’t cover. You’ll also need to sign up for Medicare Part D (prescription drug coverage) when you retire or lose your employer coverage, unless you have other creditable drug coverage.

What are the parts of Medicare and what do they cover?

Medicare has four parts: Part A, Part B, Part C and Part D. Part A covers inpatient hospital care, skilled nursing facility care, hospice care and some home health care. Part B covers doctor visits, outpatient services, preventive care and some medical equipment and supplies. Part C, also known as Medicare Advantage, is an alternative way to receive Medicare benefits through a private insurance company. Part C plans usually include Part A and Part B coverage, as well as extra benefits such as vision, dental and hearing care. Part D covers prescription drugs and is offered by private insurance companies.

How do I decide whether to enroll in Medicare Part C or stay with Original Medicare (Part A and Part B)?

There is no one right answer to this question, as it depends on your personal preferences, health needs and budget. Some factors to consider are:

·        The cost of premiums, deductibles, copays and coinsurance

·        The availability of doctors, hospitals and pharmacies in your network

·        The benefits and services that are included or excluded in each plan

·        The quality and customer service ratings of each plan

You can compare different Medicare Part C plans using the Medicare Plan Finder tool on the official Medicare website.

How does COBRA and Medicare work?

COBRA is a federal law that allows you to keep your employer-sponsored health insurance for a limited time after you leave your job or lose your coverage. However, COBRA is not considered creditable coverage for Medicare purposes, which means that if you delay enrolling in Medicare Part B or Part D while on COBRA, you may face late enrollment penalties when you sign up later. Therefore, it’s usually advisable to enroll in Medicare as soon as you become eligible, even if you have COBRA coverage. You can then decide whether to keep or drop your COBRA coverage based on your needs and costs.

How do I sign up for Medicare when I’m ready?

You can sign up for Medicare online, by phone or in person. To sign up online, visit the Social Security website and follow the instructions.