# May, 03, 2019

65 and Working. Do I Need to Enroll in Medicare?

Between changes to Social Security eligibility and increases in life expectancy, many Americans are delaying retirement to well past age 65. However, even if you don’t retire, you’re still eligible for Medicare at age 65. But, if you already have health insurance through an employer, do you need to enroll in Medicare?

This post describes everything you need to know about enrolling in Medicare if you’re turning 65 soon and are still employed. This information is also applicable if you have health insurance through your spouse’s employer when you turn 65.

Employment and Medicare Eligibility

If you turn 65 and already have health insurance through an employer – yours or your spouse’s – you may prefer to keep your current coverage. But, when you delay Medicare enrollment, you risk incurring late penalties. It all depends on the size of the company you or your spouse work for.

It’s important to note that, no matter how large the company you work for is, you may enroll in Medicare at any time. You may also choose to only enroll in Part A (hospital insurance) since it’s premium-free for most beneficiaries.

The Size of the Company Matters

If the company you work for employs fewer than 20 people and you don’t want to pay a penalty for late enrollment, you need to sign up for Medicare (within three months of your 65th birthday).

You can delay registration without penalty if your company employs 20 or more people, assuming your insurance is what the IRS defines as “group health plan” coverage. Talk to your benefits administrator to be sure. Also ask your plan administrator whether Medicare eligibility will cause your current insurer to deny coverage.

If you aren’t sure what you want to do, look closely at your Medicare options and how they compare to your current coverage.

Once you retire or your employment ends, you qualify for a Special Enrollment Period (SEP). This gives you eight months to sign up for Parts A and B.

What about COBRA and Retirement Benefits?

Both COBRA and retiree benefits are considered secondary to Medicare. Failure to register upon termination of employment carries penalties once you do sign up for Medicare. And, if your COBRA or retiree plan discovers you’re eligible for Medicare, they’ll likely deny claims.

What Happens if You Delay Enrollment?

Failure to sign up for Medicare upon becoming eligible carries a variety of penalties, including:

  • Your current plan may refuse to pay your claims.
  • If you don’t qualify for premium-free Part A, you pay a 10 percent penalty for every year you delay registration, payable for twice the number of years you delayed.
  • Delayed Part B enrollment penalties are 10 percent for the first year you could have had Medicare and failed to enroll, 20 percent year two, etc. You pay this penalty for the entire time you have Medicare.
  • Delayed Part D enrollment depends on the number of months you go without creditable drug coverage (1 percent for each month) and the national base beneficiary premium, which changes every year.
  • If you want a Medigap plan, you’ll have to undergo medical underwriting, which may result in refusal of coverage or higher premiums.

The day your employment ends is the day the enrollment countdown clock starts ticking. If you miss your SEP window, you have to wait for the General Enrollment Period (GEP), which lasts from January 1 through March 31. You then must wait until July 1 for coverage to begin, so you could go months without health insurance.

How Do You Enroll in Medicare while Still Employed?

The enrollment process is the same whether you’re employed or not. Your Initial Enrollment Period (IEP) begins three months before your 65th birthday and ends three months after your birth month. So, if your birthday is September 10, your IEP begins June 1 and ends December 31. You sign up through the Social Security Administration, either online, over the phone, or in person.

If you have the required work history (40 credits or 10 years), you qualify for premium-free Part A and it’s highly recommended that you register, even if you have coverage through an employer. It doesn’t cost you anything and helps supplement your current hospital coverage.

You may also enroll in Part D, even if you don’t enroll in Part B. In fact, if your employer-sponsored insurance doesn’t include “creditable” prescription drug coverage (i.e. comparable to Medicare’s prescription drug coverage), you have to enroll in Part D if you want to avoid penalties. Talk to your plan administrator to determine whether it is creditable.

If you don’t enroll in Part B when you first become eligible, you may enroll later, including while you – or your spouse – are still employed.

Final Thoughts on Medicare and Employment

It’s important you begin exploring your Medicare options before reaching your 65th birthday. Talk to your plan administrator to determine your current coverage and whether you should expect changes after your birthday. And, even if you won’t receive penalties for remaining with your employer-sponsored coverage, it’s smart to compare your options to determine what’s the best choice for you.


Kolt Legette

Since 2015, Kolt Legette has helped clients navigate the often-confusing world of insurance. His number one goal is protecting the medical and financial wellbeing of every person he speaks with, whether they choose to buy insurance or not. Kolt loves representing the best brands in medical insurance as it allows him to provide side-by-side comparisons for his clients. This allows the client to decide which company works best for them. By putting the needs of the client above everything else, Kolt helps real people find affordable health insurance solutions for their most pressing healthcare needs. With his belief that peace of mind is priceless, Kolt's goal in every interaction is to make sure every person he speaks to leaves with the peace of mind they rightfully deserve.

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Last Updated 12/21/2018