Do I have to take Medicare at 65 if still working?

Depending on the size of the employer, you might or might not be required to take Medicare. Also, depending on the cost and coverage of the company plan vs. Medicare, you may want to take Medicare even if not required to take it.

How many people are covered under your company insurance plan?

The critical number is 20. If you or your spouse’s company plan has more than 20 employees covered under the group health plan, by law the company must continue to offer you health coverage. In this scenario you are permitted to defer your Medicare enrollment until you or your spouse no longer have employer coverage. Once employer coverage ends, you have a “special enrollment” for Medicare. There are rare occasions when it may make sense to have Medicare as a secondary to your group coverage, but keep in mind, you will have to pay an additional Part B premium.

If your company has fewer than 20 employers, Medicare becomes the primary payer of claims and the employer is no longer obligated to offer company insurance. Not signing up for Medicare in this scenario is a bad idea because you are left with no coverage. Having Medicare secondary to employer coverage rarely makes sense and in today’s insurance market. The option to do so is rare.

How good is your company coverage and how much are you paying for it?

If you have coverage through work or are on your spouse’s coverage you will want to compare the cost and coverage of Medicare vs. cost and coverage of the employer plan. Small to mid-sized Employers have been forced to pass rising cost on to employees through higher employee contribution levels and/or reducing the benefits of the health plan. The result is employees have seen rising deductions from their checks for health plans with high deductibles, co-insurance and limited provider networks. It is a good idea to evaluate the cost and coverage of your group insurance plan vs. the cost and coverage of Medicare.

Caveat: If you have a spouse not yet Medicare eligible or dependent children covered under your plan, you need to be careful. By leaving your company plan, your dependents will no longer be eligible for coverage under your plan and they will need to seek coverage elsewhere.

Isn’t there a penalty if I delay signing up for Medicare?

It’s important to emphasize that provided you have access to credible coverage through your employment or a spouse’s employment, you can defer Medicare A and B with no penalty. Once you lose coverage or decide to leave coverage, you will have a “special enrollment” period for Medicare. Credible coverage is defined as coverage “at least as good as Medicare”.

Where do I go for help?

Navigating the waters of Medicare under any circumstance can be tricky. Adding the prospect of an employer plan may muddy the waters even further. It’s best to approach your company HR director in advance of turning 65 so that you will have time to prepare. Additionally, you will want to consult the help of an independent agent who can compare Medicare coverage and supplemental insurance costs to the employer coverage and costs. If deciding to sign up for Medicare, the agent can work in tandem with your company human resources professional to assure the process is smooth and there are no gaps in coverage.

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