Should You Sign Up For Medicare If Youre 65 And Still Working
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If youre 65 or older, still working and are covered by employer health insurance, it can make sense to sign up for Medicare now. Enrollment might reduce your out-of-pocket costs.
Millions find themselves in this situation. The proportion of Americans ages 65 to 74 who are working is projected to reach 30.2% in 2026, according to the Bureau of Labor Statistics.
But Medicare is complicated, and there are a lot of caveats and some surprise expenses to be avoided. So for working people 65 or older, heres help with figuring out when to enroll in Medicare and how to avoid costly late-enrollment penalties and gaps in coverage.
A note for married couples where one spouse is covered by the others employer insurance: The information provided here also applies to you when you turn 65.
Income And Asset Limits By State
Here are the financial limits you must meet to be eligible for QDWI.
Asset limits for all states
While the income limits are based on 200% of the federal poverty level, they also include earned income exclusions. Because the QDWI program doesn’t count half of the income that you earn from work, you can actually earn quite a bit more than 200% of the FPL.
When Can You Actually Lose Your Medicare Coverage
There are two main times that you can straightforwardly lose Medicare coverage. The first is if you have Medicare as the result of a disability and you are no longer medically disabled. Medicare disability coverage is restricted to those who are currently dealing with a disability. This is a rare situation, since most disabilities that qualify dont simply go away.
If you are under 65 and have a disability, and also qualify for Medicare and then return to work, you will be able to keep your coverage without paying premiums for Part A for 8 and a half years. After that, you can still keep your coverage, but will have to pay a premium. This situation can get a bit more complex, and the full details are available from Medicare.gov.
Second, you can lose Medicare coverage if you enroll in a health savings account. We’ll discuss this in more detail below.
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Younger Than Age : Who Is Eligible For Medicare
As long as you meet the citizenship/legal residence requirements described above, you may be eligible for Medicare when you are younger than age 65 if one of the following circumstances applies to you:
- You have been receiving Social Security disability benefits for at least 24 months in a row
- You have Lou Gehrigs disease
- You have permanent kidney failure requiring regular dialysis or a kidney transplant. This condition is called end-stage renal disease .
Read more details about enrollment in Medicare when youre under 65.
What About Medicare Supplement Plans
Medicare Supplement plans, also known as Medigap plans, uniquely fit into these situations. These plans are only available to individuals who are enrolled in Original Medicare. This means that if you drop or lose your Medicare coverage, then you will drop your Medicare Supplement plan coverage as well.
A notable key element here is the fact that insurance companies that sell Medicare Supplement plans are allowed to use medical underwriting. This means that they can decide not to sell you a plan based on your pre-existing conditions or health status.
However, they are not allowed to do this when you first become eligible for Medicare. If you enroll in a Medigap plan during the Medicare Initial Enrollment Period, then you will be able to purchase any Medicare Supplement plan that you like, without the company being able to use underwriting.
If you then drop your Medicare coverage, you will drop your Medicare Supplement plan coverage as well. In this case, insurance companies will be able to use underwriting if you try to purchase a plan later on. This can be a significant burden for some, so make sure you think to make an informed decision if you have a Medigap plan.
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Can You Get Medicare If You Are Still Working
- Your current employment status is not a factor in whether or not youre eligible for Medicare at age 65.
- If you initially decline Medicare coverage, you may have to pay a penalty if you decide to enroll at a later date.
You can get Medicare if youre still working and meet the Medicare eligibility requirements.
You become eligible for Medicare once you turn 65 years old if youre a U.S. citizen or have been a permanent resident for the past 5 years. You can also enroll in Medicare even if youre covered by an employer medical plan.
Read on to learn more about what to do if youre eligible for Medicare and are still employed.
What Is The Walgreens Prescription Savings Club
- Find out how you can save money on medications by becoming a member of the Walgreens Prescription Savings Club. Learn about membership types and costs.
The Walgreens Prescription Savings Club is a way to save money on your prescription medications. Members get discounts on a variety of generic and brand-name drugs, as well as a few other in-store perks. If you’re eligible, the club can help keep healthcare costs in check for you, your family and your pets.
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Large Vs Small Employers
If you work at a small employer plan, your employer is permitted to require you to get Medicare when you turn 65. At that time, Medicare will become your primary health insurer. Your employer also has the option to cancel your workplace plan or retain it as a secondary payer of covered insurance claims. This distinction is important because it can affect the package of Medicare plans you may need, especially whether you need a Medigap supplement plan.
If you work at a large employer plan, your employer cannot treat you differently than younger employees. You and, if applicable, your spouse, must continue to be offered employer health insurance. These rules are very clear. If an employer with a large health plan tells you that you must get Medicare at age 65, it is breaking the law. The single exception is for people turning 65 who have end-stage renal disease they can be required to get Medicare.
Employees with access to large employer-sponsored plans do not have to get Medicare, but they may do so if they wish. Historically, employee plans were so comprehensive and affordable that it seldom made sense for someone to get Medicare. However, rising health care expenses have led many employers to reduce the percentage of the coverage they pay, with many adopting high-deductible plans.
Anyone considering this decision should contact their employer plan. They should ask two primary questions:
Do I Need To Get Medicare Drug Coverage
You can get Medicare drug coverage once you sign up for either Part A or Part B. You can join a Medicare drug plan or Medicare Advantage Plan with drug coverage anytime while you have job-based health insurance, and up to 2 months after you lose that insurance.
Even if you have a Special Enrollment Period to join a plan after you first get Medicare, you might have to pay the Part D late enrollment penalty. To avoid the Part D late enrollment penalty, dont go 63 days or more in a row without Medicare drug coverage or other .
If you have other drug coverage: Ask your drug plan if its creditable drug coverage.
Each year, your plan must tell you if your non-Medicare drug coverage is creditable coverage. Keep this information you may need it when youre ready to join a Medicare drug plan.
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If I Work I Will Lose My Health Care Benefits
I have ongoing health care needs that I would never be able to pay for myself. People tell me I shouldnt work because then I might not be able to see my doctors and get the care I need.
Losing your health care benefits can be a big concern, if you are thinking about going to work. However, several programs can help you keep your health care benefits when you go to work. Some jobs offer employer-sponsored health care benefits, but that might not be enough. Some people may also want to keep their Medicare or Medicaidbenefits.
It is important to know what type of health care coverage you have, so you know what happens to that coverage when you go to work. Here are descriptions of the most common public health care coverage programs for people with disabilities.
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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Qualifying Medical Conditions And Disabilities
The Medicare program also offers coverage to you, regardless of work history and age, if you are dealing with certain health challenges.
- If you have been diagnosed with End-Stage Renal Disease, you are eligible for Medicare beginning the first day of the fourth month you receive dialysis.
- If you have been diagnosed with ALS , you are eligible for Medicare once you begin receiving Social Security Disability Insurance .
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Questions To Ask Your Employer Benefits Manager Include:
- Will my health insurance change if I enrolled in Medicare? If so, how?
- How much is deducted from my paycheck for my employer health insurance?
- Do I have through my employer?
- How will my covered dependents be impacted if I choose to get Medicare?
This information will help you weigh your choices and decide whats best for you. You may decide to enroll in Medicare Part A, Part B or both. Or you may be able to and want to delay enrolling in Medicare all together until you retire.
Enrollments Periods For Medicare Parts C And D
Once a person enrolls in original Medicare, they may add a Part D plan or switch to Part C during the IEP. A person may also do either during the Open Enrollment Period for Medicare Advantage and Medicare prescription drug coverage, which runs from each year.
The best time to enroll in Part D is during the IEP. If someone waits until open enrollment, they may have a penalty in the form of a higher Part D plan premium.
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Medicare Part B: Delay To Avoid Premiums
If youre 65 or older and you or your spouse still have employer health coverage, you will probably want to delay enrolling in Medicare Part B, which pays for doctor visits and many other outpatient services. Why? Because unlike Medicare Part A, everyone pays a premium for Part B, so its never a free add-on.
As with Part A, your particular circumstances can influence your decision, and there are pitfalls to avoid:
If the employer has 20 or more employees: If your or your spouse’s employer has 20 or more employees and a group health plan, you’re not required to sign up for Medicare at age 65. But the clock starts ticking once you stop working or lose your employer coverage , so don’t miss your window.
If the employer has fewer than 20 employees: If your or your spouse’s 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 B, which will be your primary insurance.
If you have an HSA and want to keep contributing: If you have an HSA and want to continue making contributions to it, you must delay signing up for Medicare Part B. Stop making contributions to your HSA at least six months before you sign up for Part B. And youll want to sign up for Medicare at least a month before you stop work or lose employer coverage.
Signing Up For Medicare Part A At 65 If Youre Still Working
If you’re still working at age 65 and not claiming Social Security benefits, the government will not automatically enroll you in Medicare Part A, which covers hospital stays.
If you work for a company with 20 or more employees and you’re enrolled in your employer’s health insurance plan, you do not have to enroll in Part A. If your employer covers the bulk of your premiums, you have a low deductible, and you’re not eligible for premium-free Part A, it might make sense to continue relying solely on your workplace coverage.
If you’re eligible for premium-free Part Amost people are because they’ve paid Medicare taxes throughout their working yearsyou might as well enroll since you’ve earned it. As secondary health insurance, Part A may cover hospital expenses your employer’s plan does not.
If you work for a company with fewer than 20 employees, you should enroll in Part A as soon as you’re eligible. Medicare will become your primary payer.
If you’re covered by a Health Insurance Marketplace plan or COBRA, you should sign up for Medicare Part A during your initial enrollment period, which starts three months before you turn 65, includes your birthday month, and ends three months after you turn 65.
Although Medicare Part A pays for inpatient hospital stays and nursing care, there’s an annual deductible, which is $1,484 for 2021 and $1,556 for 2022. Many people don’t pay a monthly premium for Part A, and there are no coinsurance costs for hospital stays of 60 days or less.
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Medicare Eligibility: Key Takeaways
- Generally, youre eligible for Medicare Part A if youre 65 and have been a U.S. resident for at least five years.
- When youre notified youre eligible for Part A, youll be notified that youre eligible for Medicare Part B.
- You need to be eligible for both Medicare Part A and B in order to enroll in Medicare Advantage.
- To be eligible for Medicare Part D prescription drug coverage, you must have either Medicare Part A or Part B, or both.
- If youre enrolled in both Medicare Part A and B, and dont have Medicare Advantage or Medicaid benefits, then youre eligible to apply for a Medigap policy.
For the vast majority of Americans who look forward to receiving Medicare health benefits, eligibility is as uncomplicated as celebrating your 65th birthday.
But your eligibility to receive Medicare coverage without having to pay a premium and your eligibility for other Medicare plans depends on such factors as your work history and your health status. Heres what you need to know:
Medicare Coverage For People Who Never Worked
Your Medicare Part A coverage is essentially paid for while in the workforce since you pay taxes for Medicare while employed. If you never worked, you likely will not be eligible for premium-free Part A, which covers inpatient care and hospital stays.
You can still get Part A without any work history to do so, youll have to pay a monthly premium like any other form of insurance. That premium could be reduced if you spent some time in the workforce.
For example, if you were employed for years but put your career on pause to be a stay-at-home parent or for any other reason, you could be eligible for a reduced premium.
If you never worked, then your Part A premium for 2022 will be $499. But if you spent at least 30 to 39 quarters in the workforce and paid Medicare taxes, your premium could be reduced to $274.
Medicare Part B, which covers outpatient care, comes with a monthly premium that is not affected by your work history.
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