Retirement doesn’t always mean a clean break from work the day you turn 65. For many individuals, working beyond the age of 65 is the best choice for a variety of reasons including benefits, life and retirement goals and more.
What many people do not realize is that even if you (or your spouse) plan to continue working beyond age 65, you need to take important steps around your 65th birthday to defer Medicare benefits if your primary insurance is through your employer. Not taking the right steps on time could lead to unpleasant surprises like lifetime penalties, periods without health coverage and even insurance claim issues.
Factors to Consider Regarding Medicare Deferment
If you or your spouse plan on working past age 65 and have employer coverage, then it may make sense for you to defer some or all of your Medicare benefits (made up of Part A and Part B).
It is possible to proceed with enrollment in Medicare Part A at age 65, and it could help with some of the costs that your employer’s insurance does not cover. Enrollment in Part A may conflict with contributions to Health Savings Accounts if you have one, so please consult with your Human Resources department before enrolling. Part A enrollment is also mandatory if you choose to receive Social Security benefits.
In most cases, individuals who are working past 65 could defer Part B with minimal or no conflicts.
Expert Tip: At age 65 or older (rules are different under 65), Part B deferment is only available to individuals who work for an employer with 20 or more employees. If your company has fewer than 20 employees, you must sign up for Part A and Part B when you turn 65, and then Medicare pays your insurance claims first and your employer coverage pays second (if a balance remains).
If you want to be certain, call Medicare at 1-800-MEDICARE and ask them if you can defer Part B without any penalties.
Timing Your Medicare Deferment
Your IEP is a seven-month window that begins three months before your birthday, includes your birth month, and three months after your birthday.
To defer Part B, the first step is to call 1-800-MEDICARE. Because each individual’s situation is so different, it is best to start by speaking to them to determine what your immediate next steps should be.
Enrolling in Medicare Part B Upon Retirement (Past Age 65)
If you take all the right steps now, you will set yourself up for a smooth entry into Medicare. Once you retire and no longer have employer coverage, you will have an eight-month window (called a Special Enrollment Period or SEP) during which you can enroll in Part B without incurring any penalties. This is assuming that you are past your seven-month IEP.
Expert Tip: COBRA and retiree insurance are not considered active employer coverage, so if you are covered by one of those options and do not sign up for Part B within the eight-month window, you will have to pay the Part B late enrollment penalty.
Finding an Advisor to Help
Health plan decisions are important and navigating the details can be stressful. That’s why having a health plan advisor you trust is so important. RetireMEDiQ is here to help you when you are ready to retire! RetireMEDiQ is a health plan advisory service for retirees and retiring individuals in Ohio, Indiana and Kentucky that provides trusted guidance to your ideal health plan.
Our compassionate team of experts saves clients time, money and delivers peace of mind by providing:
- Tailored, one-on-one health plan advice
- Assistance enrolling in the plan of your choice
- Year-round support
Best of all our services are available at no cost to you.
Enrolling in Medicare doesn’t have to be confusing. We are here to help!
If you are not a RetireMEDiQ client and have questions about Medicare, transitioning into retirement or how we can serve you, please contact us at 1-866-600-5638 or firstname.lastname@example.org to get started on your Medicare journey.