Medicare Part A: If Its Free Why Not Take It
If by the time you reach 65 youve worked a total of approximately 10 years over your career, youre entitled to premium-free Medicare Part A, which pays for in-patient hospital charges and more.
Why sign up for more hospital insurance when an employer plan already provides good coverage at low cost to you? Because in some cases, Medicare Part A may cover what your employer plan does not.
But as with so many aspects of Medicare, there are caveats, exceptions and potential pitfalls.
If the employer has 20 or more employees: If your or your spouses employer has 20 or more employees and a group health plan, you dont have to sign up for Medicare at 65 if it doesnt make financial sense.
If the employer has fewer than 20 employees: If your or your spouses employer has fewer than 20 employees and the health coverage is not part of a multiemployer group plan, at age 65 you must enroll in Medicare Part A, which will be your primary insurance. Primary means that Medicare pays first, and then the employer insurance kicks in to pay whatever might be covered under that policy but was not covered by Part A.
If you have an HSA and want to keep contributing: If youre saving to a Health Savings Account and wish to keep doing so, you must delay enrollment in Medicare Part A , because Medicare enrollees cant contribute to an HSA. In fact, to avoid a tax penalty, you should plan to stop making HSA contributions at least six months prior to signing up for Medicare.
What Are The Benefits Of Getting Medicare While I Am Working
If youre unhappy with your current insurance, you might prefer the Medicare coverage. For example, your private health insurance may restrict you to a small network of doctors, while 99% of nonpediatric physicians accept Medicare. Switching to Medicare may also save you money on out-of-pocket costs versus your existing plan.
Even if you like your current insurance, you can enroll in Medicare as well. If you work for a large employer, Medicare would typically be your secondary policy.
Theres little downside to enrolling in Part A. It covers hospital stays and skilled nursing care once youve paid the deductible , and its premium-free to anyone who worked for at least 40 quarters in Medicare-covered employment.
Do I Have To Sign Up For Medicare If I’m 65 Or Older And Still Working
If you’re age 65 or older, eligible for Medicare, and have insurance through your current job or your spouses current job, you need to make some important Medicare enrollment decisions.
If you don’t enroll on time, you may have to pay a penalty. Before you make any changes, it’s good to understand how your current coverage works with Medicare about four to five months before you become eligible for Medicare.
Ask your benefits manager or human resource department how your employer health insurance works with Medicare, and confirm this information with the Social Security Administration and Medicare .
When you retire or if you lose your employer coverage, you will get a Special Enrollment Period to sign up for Medicare. Be sure to review the rules carefully, so you don’t miss deadlines.
Note: If you have a Health Savings Account, you and your employer should stop contributing to it 6 months before you sign up for Medicare Part A to avoid an IRS tax penalty. As well, before you enroll in Medicare while still working, check with your employer to see if their employer group health plan coverage for prescription drugs is creditable coverage. If it is not creditable, you could face paying Medicare Part D penalties later on.
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How Do I Decide Which Approach Is The Most Cost
When you have access to both an employer-based plan and Medicare, deciding on the most cost-effective approach to building insurance coverage takes a bit of work. To start, add up each plans out-of-pocket costs, including its premiums, deductibles, copays, and prescription drug costs. Consider what treatments, services, and payments you deal with most often and what you think youll need in the near future. Your employers benefits manager should be able to help you understand your workplace insurance benefits. Once youve got that information, take a look at this Medicare guide, which may help you make your decision.
Retiree Coverage Continuing Past Age 65 Youll Still Need To Enroll In Medicare A And B
Some companies will not cut a retiree off completely at the age of 65, but instead continue to offer supplemental retiree benefits, which can be used in conjunction with Medicare . The supplemental retiree health benefits may include prescription drug coverage , doctor visits, and other outpatient health care. Medicare will be your primary coverage if youre covered under a retiree health plan, with the plan offered by your former employer serving as secondary coverage.
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Medicare Premiums And Employer Contributions
Per CMS, its illegal for employers to contribute to Medicare premiums. The exception is employers who set up a 105 Reimbursement Plan for all employees. The reimbursement plan deducts money from the employees salaries to buy individual insurance policies. Beneficiaries who participate can get tax-free reimbursements, including their Part B premium.
A Health Reimbursement Account is a well-known Section 105 plan. An HRA reimburses eligible employees for their premiums, as well as other medical costs.
Your Medicare Special Enrollment Period
If your employer has at least 20 employees and youre still working and covered under that plan when you turn 65, you can delay your enrollment in Medicare . In that case, youll get an eight-month special enrollment period to sign up for Medicare if and when you leave your job or your employer stops offering coverage. It will start the month after you separate from your employer, or the month after your group health coverage ends whichever happens sooner.
Sign up during those eight months, and you wont have to worry about premium surcharges for being late. And the eight-month special enrollment period is also available if youre delaying Part B enrollment because youre covered under your spouses employer-sponsored plan, assuming their employer has at least 20 employees.
But note that in either case, it has to be a current employer. If youre covered under COBRA or a retiree plan, you wont avoid the Part B late enrollment penalty when you eventually enroll, and you wont have access to a special enrollment period to sign up for Part B youll have to wait for the general enrollment period instead.
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You Can Safely Delay Medicare Part B Enrollment If:
If you meet the two conditions, you can delay enrolling in Medicare for up to eight months after you have stopped working at the job that provides your current insurance.
Do You Have To Get Medicare If You Are Still Working
Whether you are working or not when you turn age 65, youll still be eligible for Medicare coverage. It is not mandatory to sign up for Medicare. In fact, you may prefer the healthcare coverage offered by your employer. However, if you defer or decline Medicare coverage, you could pay some form of penalty.
Well go over some of the things you might consider before deciding to enroll in Medicare while still being employed.
- limited stays in a skilled nursing facility
If youre eligible for premium-free Medicare Part A, theres often very little downside to enrolling. You may be eligible for premium-free Part A if you paid into Medicare through payroll taxes for at least 10 years of employment.
If you work for a large company with more than 20 employees, a Medicare policy can act as a secondary payer and can help to fill in gaps in your existing coverage without any additional cost on your end.
If you work for a small company or have a health insurance plan through your employer with minimal coverage, enrolling in Medicare may help reduce your medical expenses.
Medicare will often become the primary payer in these cases and may provide better coverage than you currently receive. In fact, your small employers insurance may not cover you if they discover youre eligible for Medicare benefits and havent enrolled.
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The Size Of Your Employer Is A Key Factor In Determining The Answer
Youre turning 65 but still working and covered by your employers health insurance plan. Should you enroll in Medicare? The answer to that question is not as simple as it may appear.
The size of your employer could determine in part whether you enroll in Medicare Part B, which covers outpatient services. If your employer has 20 or more employees, your employers insurance will be your primary coverage. As long as youre still working, neither you nor your spouse if your spouse is older than 65 and covered by your plan need to enroll in Part B. When you leave your job, you and your spouse can enroll in Part B during a special enrollment period, which lasts for eight months after you stop working.
You can always drop your employer coverage while youre still working and enroll in Part B. You should compare benefits and costs of your employer coverage and Medicare. If youre considering traditional Medicare, consider costs for Part B, a Part D prescription-drug plan and a Medigap supplemental insurance plan.
If your employer has fewer than 20 employees, you should enroll in Medicare as soon as you are eligible because it becomes the primary payer. As secondary payer, your employers plan will not pay for any expenses covered by Medicare. If your spouse is on your employer plan, she or he can continue on your employer plan until age 65 as long as you keep the plan for yourself as secondary coverage. Here are other questions to consider.
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If The Employer Has 20 Or More Employees
As long as you have group health insurance from an employer for which you or your spouse actively works after you turn 65, you can delay enrolling in Medicare until the employment ends or the coverage stops , without incurring any late penalties if you enroll later. When the employer-tied coverage ends, youre entitled to a special enrollment period of up to eight months to sign up for Medicare.
Note that “active employment” is the key phrase here. You cant delay Medicare enrollment without penalty if your employer-sponsored coverage comes from retiree benefits or COBRA by definition, these do not count as active employment.
Nor does it count if you work beyond 65 but rely on retiree benefits from a former employer. You must be actively working for the employer that currently provides your health insurance in order to delay Medicare enrollment and qualify for a special enrollment period later on.
The law requires a large employer one with at least 20 employees to offer you the same benefits that it offers to younger employees . It is entirely your choice whether to:
- accept the employer health plan and delay Medicare enrollment
- have the employer coverage and Medicare at the same time
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Should I Use A Rapid Test Or Get A Pcr Test
The two main types of COVID-19 tests are rapid antigen tests and polymerase chain reaction tests. Antigen tests can be taken at home and return results in about 10 to 15 minutes. PCR tests are more accurate but require lab work and generally don’t provide results for at least 12 hours and sometimes up to five days.
Both tests typically use nasal swab samples, though some collect saliva. PCR tests administered by a professional may require a nasopharyngeal sample that involves a much deeper nostril swab. Rapid antigen tests usually require swirling a swab in the nostril less than an inch deep.
PCR tests amplify genetic material from the collected sample up to a billion times to detect even the slightest amount of COVID-19 genes, making them highly accurate. They’re also more expensive, usually costing more than $100 apiece.
Rapid antigen tests simply detect the presence of COVID-19 antigens — the substances that prompt your immune system to create antibodies — and work much like home pregnancy tests. If your sample contains COVID-19 antigens, the thin line of SARS-CoV-2 antibodies on the test strip will change color.
Because rapid tests are simply looking for the existence of antigens, they work best when someone is symptomatic. Rapid antigen tests are less successful with early infections and asymptomatic cases. The risk of a false negative is much higher with a rapid test than a false positive.
Your Medicare Choices When Working
You have a number of Medicare decisions to make when you turn 65 and this is especially true when you have other health insurance. Its a good idea to start learning about your choices ahead of turning 65. Preparation can help you get the coverage that best meets your needs while avoiding unnecessary costs and give you the confidence you want in whatever decision you end up with.
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Difference Between Active Employment Vs Retiree Benefits
There are different benefits beneficiaries can receive whether theyre actively working or deciding to retire. The main benefit that creates a huge impact on your healthcare plans is the enrollment period technicalities associated with both.
If you or your spouse are actively working, meaning your employer coverage does not come from retiree benefits or COBRA, then youre exempt from late enrollment periods and are assigned a Special Enrollment Period.
If youre retired and enjoying employer benefits, that does not count as being actively employed. When you choose to delay enrollment in Medicare, youll need to pay late enrollment penalties.
If You Work For A Big Company
The general rule for workers at companies with at least 20 employees is that you can delay signing up for Medicare until you lose your group insurance . At that point, you’d be subject to various deadlines to sign up or else face late-enrollment penalties.
While everyone’s situation is different, there’s a good chance your current insurance through work is a more cost-effective option, said Danielle Roberts, co-founder of insurance firm Boomer Benefits in Fort Worth, Texas.
This may be due to lower premiums and other cost-sharing aspects such as copays or co-insurance, or lower costs for prescriptions under the group plan.
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On the other hand, if you take a specialty drug that is covered by your group plan, it might be wise to continue with it if that drug would be more expensive under Medicare.
Some 65-year-olds with younger spouses also might want to keep their group plan. Unlike your company’s option, your spouse must qualify on their own for Medicare either by reaching age 65 or having a disability if younger than that regardless of your own eligibility.
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For Workers At Small Businesses
If you have health insurance through a small company , you should sign up for Medicare at age 65 regardless of whether you stay on the employer plan. If you do choose to remain on it, Medicare is your primary insurance.
However, it may be more cost-effective in this situation to drop the employer coverage and pick up Medigap and a Part D plan or, alternatively, an Advantage Plan instead of keeping the work plan as secondary insurance.
Often, workers at small companies pay more in premiums than employees at larger firms.
The average premium for single coverage through employer-sponsored health insurance is $7,470, according to the Kaiser Family Foundation. However, employees contribute an average of $1,243 or about 17% with their company covering the remainder.
At small firms, the employee’s share might be far higher. For example, 28% are in a plan that requires them to contribute more than half of the premium for family coverage, compared with 4% of covered workers at large firms.
What Happens If I Decline Medicare Coverage
If you work for an employer with more than 20 employees and get insurance through that employer, you can decline Medicare with no penalty, as long as you sign up during your special enrollment period later on.
If you dont have employer-based insurance, or your employer has fewer than 20 employees, declining Medicare now means youll end up paying higher premiums each month when you do finally enroll:
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People who have to pay for Part A will see their premiums go up 10%.
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For Part B, premiums go up 10% for every 12 months that you dont sign up.
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The penalties for signing up late for Part D reflect a complicated formula based on the amount of time you went without insurance and the national base beneficiary premium.
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You Should Sign Up Right Away If:
- You get health insurance from an employer with fewer than 20 employees
- Youre enrolled in individual health insurance, like an Obamacare plan
- You rely on a Christian health ministry, short-term insurance, or have no insurance at all
- Youre using COBRA, retiree insurance, or health insurance from a previous job or
- You have VA health coverage.
If you choose to delay Medicare, youll want to consider the financial implications of doing so first since most Medicare beneficiaries are satisfied with their coverage and healthcare costs. If you didnt sign up for Medicare when first eligible, you may face possible late enrollment penalties.
Instead of delaying enrollment, you could opt-out of Medicare forever however, that means you would also have to forego Social Security benefit. If you really want to do this, you would have to speak with Social Security.
