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Understanding Medicare

How to sign up and manage Medicare coverage when retiring late

October 1, 2022
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Medicare eligibility begins at age 65, but do you have to sign up then? The answer is not necessarily cut and dry. It depends on your situation and who pays for your healthcare services while you’re still working—Medicare or your current coverage.

If you plan to keep working past age 65—or if you have employer coverage through your spouse—you may wish to delay enrolling in Medicare. If so, it’s important to understand what your options are once you do retire. A wise first step would be to talk to someone in the employer’s Human Resources department.

If you’re retiring late, the chart below may help you determine if and when you should sign up for Medicare.

But first, a few important definitions:

If you are still working and…How your coverage works with Medicare (Parts A & B)
Your workplace (or your spouse’s workplace) has fewer than 20 employees• Medicare pays for services first, and your company’s insurance plan pays second.
• If you don’t sign up for Part A and Part B, your company’s insurance might not cover the costs for services you get.
• Ask the employer if you need to sign up for Part A and Part B when you turn 65 to make sure you will be covered.
Your workplace (or your spouse’s workplace) has more than 20 employees• Your company’s insurance plan pays first, and Medicare pays second.
• If you don’t have to pay a premium for Part A, you can choose to sign up when you turn 65 (or anytime later).
• You can wait until you stop working (or lose your health insurance, if that happens first) to sign up for Part B, and you won’t pay a late enrollment penalty.
You (or your spouse) receive payment from an employer to buy your own health insurance
You (or your spouse) are still working, but you don’t have health insurance through that job
• Medicare doesn’t work with your insurance.
• Once you sign up, Medicare pays first.
• Some private insurance will lower what they pay—or won’t pay at all—for services you get if you’re eligible for Medicare.
• Ask your health insurance company if you need to sign up for Part A and Part B when you turn 65.

When you do retire—or lose your employer coverage—you will have an 8-month Special Enrollment Period to enroll in Medicare Parts A and B. A word of caution, though: if you do not enroll during the 8-month period, you could face a late enrollment penalty fee. Your monthly Part B premium may go up 10% for each full 12 months in the period that you could have had Part B but didn’t enroll. You will have to pay the penalty as long as you have Medicare.

In the first two months of the Special Enrollment Period, you have the option to enroll in a Medicare Advantage plan. A Medicare Advantage plan is also called Medicare Part C. It is an “all in one” plan option you can sign up for instead of Original Medicare (Part A and B). It includes all benefits and services covered under Part A, Part B, and usually Part D.

You should be aware that staying with your (or your spouse’s) group health plan may not always be the best choice. It comes down to cost and coverage. Depending on the type of group plan you have now, and the amount of money the employer contributes to your monthly premium, you may find that it’s less expensive to switch to a Medicare Advantage plan.

It pays to research your options. Here’s where you can learn more about Medicare Advantage plans at CCA:

Enrolling in Medicare when you retire late can often be confusing—and you want to be sure that do not incur a penalty for enrolling late. When the time comes to sign up for Medicare, it is best to consult with an employer’s Human Resources department or talk to an insurance agent who specializes in Medicare.


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