Theres A Push For Change
If the rules governing the transition to Medicare sound complicated, rest assured that experts agree. Moving into Medicare from other kinds of health insurance can be so complicated that it should be a required chapter in Retirement 101, Mr. Moeller said.
The only government warning about the risks associated with late enrollment comes in the form of a very brief notice near the end of the annual Social Security Administration statement of benefits.
The Medicare Rights Center and other advocacy groups have proposed legislation that would require the federal government to notify people approaching eligibility about enrollment rules, and how Medicare works with other types of insurance. The legislation the Beneficiary Enrollment Notification and Eligibility Simplification Act, also would eliminate coverage gaps now experienced by enrollees during the Initial Enrollment Period and General Enrollment Period. The legislation was introduced in Congress last year, and will be reintroduced this year.
In the meantime, Mr. Baker proposes a simple rule of thumb to help people approaching Medicare eligibility to avoid costly errors.
If you are eligible for Medicare, you should really consider it to be your default, primary coverage. If you are going to decline Medicare, think very carefully and take the time to really understand all the rules.
When Would I Enroll If I Delay Or Only Take Part A
If you are able to delay enrolling in either all or part of Medicare, you will have a Special Enrollment Period of eight months that begins when the employer coverage is lost or when your spouse retires. During this time, youll be able to enroll in Medicare Parts A & B. You can also enroll in a Part D prescription drug plan. And, after you enroll in Part B, youll be able to enroll in a Medicare supplement insurance plan or a Medicare Advantage plan.
How Does Cobra Affect The Decision Of When To Enroll In Medicare
In most cases, after a persons employment ends, they may continue to receive coverage from their group health plan for 18 months. This continued coverage is called COBRA. The premiums of the plan may cost more during this period.
To avoid a Medicare penalty, an individual must enroll in Part B within 8 months after their employment ends. This is a requirement whether or not someone is receiving COBRA.
Once a working person enrolls in original Medicare, parts A and B, they are eligible to join two other Medicare programs to get additional coverage: Part D, which provides prescription drug coverage, and Medigap, which is Medicare supplement insurance.
Medigap helps pays 50100% of parts A and B out-of-pocket costs less deductibles and premiums.
Someone with original Medicare may also choose to switch to Medicare Advantage , which is the alternative to parts A and B.
Advantage plans provide the hospital and medical insurance of original Medicare, but many also include prescription drug coverage. Some plans offer extra benefits, such as dental and vision care.
Also Check: Can I Change My Medicare Advantage Plan Now
When Should I Sign Up For Medicare
Generally, we advise people to file for Medicare benefits 3 months before age 65. Remember, Medicare benefits can begin no earlier than age 65. If you are already receiving Social Security, you will automatically be enrolled in Medicare Parts A and B without an additional application. However, because you must pay a premium for Part B coverage, you have the option of turning it down. You will receive a Medicare card about two months before age 65. If you would like to file for Medicare only, you can apply by calling 1-800-772-1213. Our representatives there can make an appointment for you at any convenient Social Security office and advise you what to bring with you. When you apply for Medicare, we often also take an application for monthly benefits. You can apply for retirement benefits online.
If you didnt sign up when you were first eligible for Medicare, you can sign up during the General Enrollment Period between January 1 and March 31 each year, unless you are eligible for a Special Enrollment Period.
When Do I Apply For Medicare If Im Still Working At 65
What if youre still working when you hit 65? If you qualify for Medicare, but youre not getting Social Security benefits yet, you usually dont get enrolled automatically in Medicare.
Some people decide to:
- Enroll in Medicare Part A as soon as theyre eligible. Even if your employer plan has hospital coverage, Part A is premium-free for most people. If your employer plan has hospital coverage, and you have a hospital stay, your plan and Medicare Part A will coordinate benefits to work out payment of your hospital costs.
- Delay enrollment in Medicare Part B. Theres typically a monthly Part B premium, and if youre covered by an employer plan for now, you may be able to save money by delaying enrollment in Part B.
But youll want to make sure you sign up for Medicare Part B when your employer-based coverage ends. Theres a Part B late enrollment penalty, but you can generally avoid it if you sign up for Part B during a Special Enrollment Period when your other coverage stops.
Its important to be sure about what youre doing so that you can avoid Medicare late enrollment penalties. Contact your employer- or union-based health plan administrator with any questions you have to help ensure a smooth transition to Medicare coverage.
Read Also: Does Aspen Dental Accept Medicare
The Size Of Your Employer Is A Key Factor In Determining The Answer
You’re turning 65 but still working and covered by your employer’s 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 employer’s insurance will be your primary coverage. As long as you’re 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 you’re still working and enroll in Part B. You should compare benefits and costs of your employer coverage and Medicare. If you’re 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 employer’s 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.
Thinkstock
Medicare Before You Retire Maybe
Before you do anything about enrolling in Medicare, you need to talk with your employer benefits manager. You need to understand if your employer insurance qualifies as creditable coverage that could allow you to delay Medicare as well as find out how Medicare and your employer coverage may work together. In some cases your employer coverage will enable you to put off Medicare enrollment, and in other cases you may be required to take full Medicare benefits at age 65 even if you continue working. Quickly discover your options here.
Don’t Miss: What Is The Monthly Charge For Medicare
Does Having Both Medicare And Employer Benefits Affect Spousal Coverage
Medicare is individual health insurance coverage, which means that it doesnt include coverage for spouses or dependents. Most group health plans, on the other hand, do include some sort of coverage option for dependents and spouses.
No matter what your group health plan offers, its important to understand that Medicare benefits arent extended to anyone other than the beneficiary.
This means that if the employee of the group health plan receives Medicare benefits along with their employer benefits, Medicare coverage applies only to the employee. Medicare does not pay out for services received by dependents or spouses, even if the original group health plan does.
Medicare has separate eligibility rules for spouses of beneficiaries. These eligibility rules, such as early eligibility and premium-free Part A, should be taken into consideration when considering overall health plan enrollment.
Medicare Part B Premiums And Deductibles
In 2021, the Medicare Part B monthly premium is $148.50 if you earn up to $88,000 as a single income tax filer or $176,000 as a married filer.
The Part B deductible is $203 for 2021. Please note that premiums increase in tiers at higher income levels.
For 2022, the Part B monthly premium is $170.10 if you earn up to $91,000 as a single income tax filer or $182,000 as a married filer. The 2022 deductible is $233 for the year.
Don’t Miss: How To Sign Up For Medicare Advantage
What Is Medicare Supplemental Insurance
Medicare supplemental insurance is a separate insurance policy from Original Medicare. It fills in some of the gaps that Original Medicare leaves in terms of expense coverage.
You can choose from 10 Medigap insurance plans, each of which offers a different level of coverage. The plans are standardized, which means that every insurance company that offers a plan provides the same coverage levels. Each insurer sets its own premium for every plan it offers.
Medicare Supplement plans cover expenses like deductibles, coinsurance, and copayments so you pay fewer out-of-pocket costs when you visit the doctor or stay in the hospital. Plans with greater coverage tend to come with higher premiums, so comparison shopping is essential before you choose Medicare supplemental insurance.
If youre retired at age 65, your Medigap initial enrollment period begins on the first day of your birth month and continues for six months. During that time, you can apply for Medigap insurance plans available in your zip code. When youre still working, however, you have other options.
When Do You Apply For Original Medicare
You might not even have to apply for Original Medicare, which includes Part A and Part B . Many people are enrolled automatically. That applies to you if youre already getting Social Security benefits when you turn 65.
But even if youre automatically enrolled in traditional Medicare, you do have to take action if you want other Medicare coverage. For example, say you want to buy a Medicare Supplement insurance plan. The government doesnt enroll you. You need to do that if thats what you want. Well get into this more later on.
Read Also: What Are The Costs Of Medicare Advantage Plans
If You Do Medicare Sign
- Read in app
Tony Farrell turned 65 four years ago the age when most people shift their health coverage to Medicare. But he was still employed and covered by his companys group insurance.
When his birthday came around, he began researching whether he needed to move to Medicare, and determined he could stick with his employers plan, said Mr. Farrell, a marketing and merchandising executive for specialty retailers. At the time, he was working for a company that makes infomercials in San Francisco.
Four months later, Mr. Farrell was laid off, but he kept the companys health insurance for himself and his family under the Consolidated Omnibus Budget Reconciliation Act , the federal law that allows employees to pay for coverage as long as 36 months after a worker leaves a job.
I just thought, this is great the coverage wont change, he recalled. I was just relying on my own logic and experience, and felt that if I didnt need a government service, I wouldnt sign up for it.
But Mr. Farrell unknowingly ran afoul of one of the complex rules that govern the transition to Medicare and now he is paying the price.
How Should You Decide What Healthcare Plan You Need
If youre not sure what type of healthcare coverage you need after turning 65, visit your employers human resources department. A benefits coordinator or similar professional can guide you through your options and let you know what your healthcare costs will be.
You can also contact the Social Security Administration with questions about Original Medicare. Use that time to sign up for Original Medicare Part A if you qualify for coverage without a premium.
Medicare supplemental insurance is private coverage, so youll need to get quotes in your zip code. As long as you apply during your initial enrollment period, you wont be subject to underwriting. Any insurance company that offers your desired plan in your area must give you its best rate.
You May Like: Will Medicare Pay For A Bed
If You Work At A Large 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.
“We often find that their insurance is already quite good and it doesn’t make sense to leave it,” Roberts said.
We often find that their insurance is already quite good and it doesn’t make sense to leave it.Danielle Robertsco-founder of Boomer Benefits
Again, however, if Part A is free, you can sign up as long as it wouldn’t interfere with your plans to contribute to a health savings account.
There are, of course, instances where Medicare might be the better option.
“If you’re going to, say, therapy every week and it’s a $40 co-pay, it might be cheaper to go on Medicare and get a supplement with it,” Gavino said.
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.
I Am Medicare Eligible Now But I Still Work Full Time What Should I Do
I still work full time, but am now eligible for Medicare what should I do?
Many more people are working later into and past the age of Medicare eligibility. There are many variables that come into play when turning age 65, and different options for employees. Here are the two most common, basic situations when you still work but become eligible for Medicare:
As an employee who is turning 65, you have the option to continue with the employers group health plan until you retire. You also have the option of signing up for Medicare coverage. Most individuals in this situation go ahead and sign up for Medicare Part A. Medicare Part A is a zero premium option, and Part A then becomes secondary coverage to the group plan through your employer. Occasionally, an item not covered by the group plan can then be picked up by your Medicare Part A plan.
Others choose to decline the employer coverage and sign up for both Medicare Part A, and Medicare Part B.while some simply stay on the current group plan and make no other changes until retirement.
One very important note is that once you sign up for Medicare, you can no longer contribute to you Health Savings Account . This is something to consider when thinking about remaining on the group plan but signing up for Part A.
2. Your employers employs less than 20 people.
See you next week, on Medicare Monday with Lori Good. Medicare Specialist, Beck Insurance Agency.
Don’t Miss: Can I Get Glasses With Medicare
Medicare And Employer Coverage: Coordination Of Benefits
Lets say youre going to keep your employer coverage and also apply for Medicare. Medicare coordinates benefits with your employer coverage. Which insurance pays first? That is which is the primary payer?
The size of the employer helps determine who pays first.
- If you work for a company that employs 20 employees or more, your employer coverage usually pays first. Medicare is the secondary payer, paying its portion for covered services your employers group health coverage did not pay. You might still have to pay a deductible and/or copayment or coinsurance amount.
- If you work for a small company of fewer than 20 employees, Medicare usually pays first and your employer coverage is the secondary payer. Be mindful, however, of employer coverage that has a Health Savings Account feature you typically can only contribute to your HSA for the portion of the year when you arent covered by Medicare.
Do you have questions about your Medicare coverage options and how to compare costs with your employer coverage? You can call us and speak with a licensed eHealth insurance agent. You can also begin exploring your Medicare plan options right now by clicking Browse Plans on this page.
The product and service descriptions, if any, provided on these eHealth web pages are not intended to constitute offers to sell or solicitations in connection with any product or service. All products are not available in all areas and are subject to applicable laws, rules, and regulations.
What Factors Affect Your Medicare Enrollment Status If You Are Working
Medicare is the federal health insurance program that covers people age 65 and older as well as some younger people with disabilities or specific health conditions. If youre still working at 65 and covered by your employer plan, several factors will affect your Medicare enrollment status:
-
The size of your employer: If your company has fewer than 20 employees, youll need to sign up for Medicare during your initial enrollment period.
-
Whether you have spousal coverage: If you get insurance through your spouses employer, the same employer-size rule applies.
-
The quality of your drug coverage: If your health insurance doesnt include , as defined by Medicare, youll need to purchase a stand-alone drug plan that meets those standards. Going without this level of prescription drug coverage for more than a few months will cause Medicare to charge you a late enrollment penalty on top of your Part D premium after you sign up.
You May Like: What Is The Coinsurance For Medicare Part B
