How Rich Is Your Employer Group Health Coverage
Is it great, the best insurance youve ever had? Well good for you! You can rest easy knowing that you are covered well and dont need Medicare yet.
Is your insurance anything less than stellar? Then you might want to think about having Medicare in addition to your group health plan.
As we mentioned, when you work for an employer with 20 or more employees, your group health plan is your primary coverage. Medicare would be secondary.
If you were to have both Medicare and group coverage, your Medicare would supplement your group plan and may reduce some health spending. However, that might only be important to you if you have some health care spending going on and you just want more robust overall coverage. Its up to you.
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How Old Do You Have To Be To Get Original Medicare
The typical age to enroll in Original Medicare is 65 years or older. However, in certain cases, you may be eligible to enroll in Medicare at a younger age.
To be eligible for Medicare at age 65, you must be an American citizen for at least five years.
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Are you wondering if you can get Medicare before age 65? You may be eligible for Medicare before age 65 if you receive Social Security Disability benefits or if you have specific diagnoses. To receive Original Medicare before age 65 you must meet one of the following qualifications:
- Receiving Social Security Disability Income for 24+ months
Can I Get Medicare At Age 62
Retirement and Medicare typically go hand in hand. So, if you retire at age 62 are you eligible to enroll in Medicare? Unfortunately, you would not be eligible for Medicare if you retire at age 62. You can typically get Medicare at age 65.
If you retire before age 65, you may be eligible for Social Security benefits at age 62, but that will not allow you to enroll in Medicare coverage. You will need to wait until your Initial Enrollment Period begins three months before your 65th birthday to begin the Medicare enrollment process.
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Make Sure You Understand Your Costs
Medicare Part A is usually premium-free, but there is a monthly premium for Part B coverage, paid to the Social Security Administration. This premium is usually deducted from your Social Security benefit, or you are billed quarterly. See the Medicare Fact Sheet and/or the Social Security website for standard rates.
If your income has gone down, you may use form SSA-44 from the Social Security Administration to request a reduction in your income-related monthly adjustment amount.
The UC-sponsored medical plans coordinate Medicare Part D coverage with the plans coverage. Most people are not charged a premium for Part D. However, as with Part B, you may pay a Part D premium based on your income. Check with Social Security to see if you are required to pay a Part D premium. These Medicare premiums are in addition to any premium you pay to UC for your UC insurance.
What Happens If You Dont Sign Up For Medicare
If you do not sign up for Medicare Part A or Part B when you first become eligible, you may be subject to a late enrollment penalty if you choose to sign up later on.
- The Part A late enrollment penalty is only applicable to beneficiaries who do not qualify for premium-free Part A . The Part A late enrollment penalty is up to 10 percent of the monthly premium , and you must pay the penalty for twice the number of years that you could have had Part A but did not. For example, if you were eligible for Part A for two years before you finally signed up, you would have to pay the extra 10 percent penalty for four years.
- The Part B late enrollment penalty is up to 10 percent of the standard Part B premium for each 12-month period that you could have had Part B but did not. You have to pay this penalty for as long as you are enrolled in Part B.
Late enrollment penalties do not apply to everyone who delays coverage, however.
For example, if you delay enrollment because you have employer-provided health insurance coverage, you may be able to enroll in Medicare Part A and/or Part B at a later date without facing a late enrollment penalty.
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Should I Take Medicare Part B
You should take Medicare Part A when you are eligible. However, some people may not want to apply for Medicare Part B when they become eligible.
You can delay enrollment in Medicare Part B without penalty if you fit one of the following categories.
Employer group health plans may cover items normally not covered by Medicare Part B. If so, and you meet one of the categories above or below, then you may not need to enroll in Medicare Part B and pay the monthly premium.
If you are:
- a spouse of an active worker
- a disabled, active worker
- a disabled spouse of an active worker
and choose coverage under the employer group health plan, you can refuse Medicare Part B during the automatic or initial enrollment period. You wait to sign up for Medicare Part B during the special enrollment period, an eight month period that begins the month the group health coverage ends or the month employment ends, whichever comes first.
You will not be enrolling late, so you will not have any penalty.
If you choose coverage under the employer group health plan and are still working, Medicare will be the “secondary payer,” which means the employer plan pays first.
If the employer group health plan does not pay all the patient’s expenses, Medicare may pay the entire balance, a portion, or nothing. An employer group health plan must be primary or nothing.
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.
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Do I Need To Enroll At 65 If I Work For A Small Company
The laws that prohibit large companies from requiring Medicare-eligible employees to drop the employer plan and sign up for Medicare do not apply to companies with fewer than 20 people. In this situation, the employer decides.
You generally need to sign up for Medicare Parts A and B during your initial enrollment period, which begins three months before and ends the three months after the month you turn 65. If you dont, you could end up with large coverage gaps.
If the employer does require you to enroll in Medicare, which is most common, Medicare automatically becomes your primary coverage at 65 and the employer plan provides secondary coverage. In other words, Medicare settles your medical bills first, and the group plan pays only for services it covers but Medicare doesnt.
So if you fail to sign up for Medicare when required, you essentially will be left with no coverage.
Extremely important: Ask the employer whether you are required to sign up for Medicare when you turn 65 or are eligible to receive Medicare earlier because of a disability. If so, find out exactly how the employer plan will fit in with Medicare. If youre not required to sign up for Medicare, ask the employer to provide the decision in writing.
When Medicare is primary coverage and the employer plan is secondary, you have the right to buy Medigap later with full federal protections. But you must do so within 63 days of the employer coverage ending.
Will The Medicare Age Be Raised To 67
In recent years, the proposal to raise the Medicare eligibility age to 67 began to gain traction. However, many are actually in favor of lowering the Medicare age below 65 rather than pushing it back to 67.
As of now, there has not been any indication that either of these proposals will become law. The standard Medicare enrollment age is currently 65 and there are no plans of changing that in the near future.
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Delaying Enrollment Could Result In A Permanent Penalty
As described above, you cant reject premium-free Medicare Part A without also giving up your Social Security benefits. But since your work history is allowing you access to Medicare Part A without any premiums, few people consider rejecting Part A coverage.
The other parts of Medicare, however, do involve premiums that you have to pay in order to keep the coverage in force. That includes Medicare Part B and Part D , as well as supplemental Medigap plans. Medicare Part C, otherwise known as Medicare Advantage, wraps all of the coverage into one plan and includes premiums for Part B as well as the Medicare Advantage plan itself.
So its understandable that some Medicare-eligible people, who are healthy and not using much in the way of medical services, might not want to enroll in Part D and/or Part B. Similarly, people who are eligible for Part A but with premiums might want to avoid enrolling in order to save money on premiums. But before deciding to postpone enrollment in any part of Medicare, its important to understand the penalties and the enrollment limitations that will apply if you decide to enroll in the future.
There are penalties associated with delaying your Medicare enrollment unless the reason youre delaying is that you are still working and youre covered by the employers health plan. If thats the case, youll be eligible for a special enrollment period to sign up for Medicare when you eventually retire.
Delaying Medicare Parts A & B
If you qualify to delay both Medicare Parts A & B, you can do so without penalty as long as you enroll within eight months of either losing your employer coverage or ceasing to work, whichever comes first. You will enroll during a Special Enrollment Period and will need to also provide written proof of creditable drug coverage to avoid Part D penalties.
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How Long Does Medicare Part D Penalty Last
Since the monthly penalty is always rounded to the nearest $0.10, she will pay $9.70 each month in addition to her plan’s monthly premium. Generally, once Medicare determines a person’s penalty amount, the person will continue to owe a penalty for as long as they’re enrolled in Medicare drug coverage.
Do You Have To Sign Up For Medicare If You Are Still Working
The most common reason for people not signing up for Medicare when they turn 65 is because they are still working. Because theyre still working, theyre likely covered under their employers health insurance plan and are also unlikely to be collecting Social Security retirement benefits.
Being covered under your employer-provided health insurance plan has no bearing on your Medicare eligibility. Medicare works in conjunction with several other types of health insurance including health insurance provided by employers or unions and wont prevent you from enrolling.
However, if you are not collecting Social Security retirement benefits at least four months before you turn 65, you will not be automatically enrolled in Medicare when you turn 65. In this case, you will have to manually sign up for Medicare when youre ready to enroll.
Many people choose to delay their Social Security retirement benefits until a later age when they can collect the full amount. If you choose to delay your retirement benefits, you must still sign up for Medicare manually once youre eligible in order to avoid any late enrollment penalties .
Some people who are still working sign up for Medicare anyway, because Medicare can work as extra insurance along with an employer group health insurance plan. Some people may decide that Medicare is more affordable than their employers insurance, so they may continue working but disenroll from their group plan and enroll in Medicare instead.
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Ask These Questions Before You Delay Medicare
Whether or not you can delay Medicare past 65 when youre working really depends on a few simple questions.
If you can answer Yes! to all the above, you likely qualify for a Medicare Special Enrollment Period and can delay enrolling without penalty. Whats the next step?and information sent directly to your inbox.
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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If Im Still Working At Age 65 When Do I Sign Up For Medicare
En español | If you arent already receiving Social Security benefits at age 65, you wont be signed up automatically. So youll have to make a decision.
Whether you need to enroll in Medicare if you continue to work and have health benefits through your job depends on the size of the employer. The same rules apply if your health insurance is through your spouses job.
How To Avoid The Late
You might not be getting retirement benefits when you turn 65 because you are still working. In this case, you will have to sign up for Medicare coverage options when you retire and lose your employer health care coverage. When your employer coverage ends, you may have a special enrollment period to sign up for Medicare Part B without receiving a late-enrollment penalty.
Generally your monthly premium for Part B may go up 10% for each full 12-month period that you could have had Part B but didnât sign up for it. Similarly, your Part A monthly premium may go up by 10% if you didnât enroll when you were first eligible. However, most people qualify for premium-free Part A and therefore are also exempt from the Medicare Part A late-enrollment penalty.
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What If I Get Health Coverage From Cobra Or Another Plan
You still need to sign up for Medicare during your initial enrollment period. You can delay signing up for Medicare only if you have insurance through your own or your spouses current employer.
If you or your spouse is not an active employee, you cant delay Medicare enrollment without penalty after leaving the job, even if you continue coverage on your employers plan through COBRA. The federal Consolidated Omnibus Budget Reconciliation Act of 1985 requires employers with 20 or more employees to let them continue health insurance coverage for up to 18 months, or up to 36 months for certain disabled individuals and family members, after they or their spouse leaves their job.
But Medicare becomes your primary coverage when you turn 65, and the COBRA coverage is secondary. This is another case where you could face big coverage gaps if you dont sign up for Medicare at the proper time.
Retiree health insurance benefits from a former employer function the same way, even if youre working in another job. You or your spouse must be actively working for the employer that now provides your health insurance if you want to delay Medicare enrollment and qualify for a special enrollment period later.
Keep in mind
Im Turning 65 Soon But I Like My Current Insurance Do I Have To Enroll In Medicare Will There Be Penalties If I Dont
It depends on how you are receiving your current insurance. If you are receiving employer-sponsored health insurance through either your or your spouses job when you turn 65, you may be able to keep your insurance until you retire. You will need to contact your employers benefits representative to find out whether they will continue your coverage when you turn 65. Since Medicare Part A is premium-free for most beneficiaries, you may want to enroll in Part A as soon as you are eligible , even if you will continue to receive employer-sponsored insurance at that time. If you are covered under an employer plan, you may want to delay signing up for Part B until you retire. However, it is a good idea to check with Social Security or Medicare to confirm you will not face a penalty for late enrollment. Similarly, unless you have drug coverage that is as good as what Medicare drug plans offer, you will need to sign up for a Medicare prescription drug plan when you enroll in Medicare or you may face a late enrollment penalty.
If you decide to drop your Marketplace coverage when you become eligible for Medicare, make sure your Medicare coverage has started before you cancel your Marketplace plan so that you avoid any gaps in coverage. You can start signing up for Medicare three months before your 65th birthday.
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