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Working past age 65? You can enjoy Medicare―without retiring.

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We’re going to compare employer coverage versus Medicare and what you need to know if you plan to keep working past the age of 65 in one minute.

We hear it all the time. What is better – should I stay on my employer coverage, or should I switch to Medicare?

What you need to remember is that retirement is not a requirement to go on Medicare. Regarding your employer coverage, you need to consider – what is my premium? What is my deductible? Do I have a spouse or any dependents on my coverage? Are those higher costs than if you went onto Medicare? What is your Medicare eligibility?

When considering Medicare, the cost for you can be much lower than your employer coverage. Medicare gives you extra benefits that your employer coverage may not give you.

Learn why more than 50,000 individuals have trusted us with their Medicare guidance.

Employment beyond Age 65 and preparing to enroll in Medicare

Now more than ever, individuals age 65 and older are delaying retirement to pursue career goals, add to their retirement savings, or reach full Social Security benefits. Many people think that Medicare is only for retirees, but this isn’t true. If you’re past age 65, you can sign up for Medicare regardless of your current employment status. Just remember, retirement is NOT a requirement for Medicare.

If you do not have ALS, ESRD, or qualify for Social Security disability benefits, your Medicare eligibility begins at age 65.

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Working Past 65 Checklist

Is it mandatory to sign up for Medicare at age 65 if I’m still working?

If you work at an organization with fewer than 20 employees, you’ll be required to enroll in Medicare Part A and Part B once you become eligible at age 65. In this situation, it generally makes sense to also enroll in a Medicare health plan. However, if you work for a larger organization, you can choose between enrolling in a Medicare plan and your employer’s group health insurance. Either way, you can have the option to enroll in Medicare without retiring. Compare your coverage to Medicare

If you are turning 65 years old and still working, you may want to confirm with your employer or union benefits administrator whether or not your group has 20 or more employees. If you are not required by group size to sign up for Medicare right away, be sure to compare your coverage as you may save a lot of money each year on a Medicare plan. When coming off employer coverage, be sure to sign up during your Special Enrollment Period to avoid a late enrollment penalty. Medicare Special Enrollment Periods (SEPs) are granted due to special circumstances, such as losing employer coverage or moving out of your plan’s service area. For instance, if you leave employer coverage, you will be able to enroll in Medicare during a Special Enrollment Period. The rules around SEPs can be confusing and depend largely on your personal situation. Call us and we can answer any questions.

Compare your plan options. We can help!

Compared to your employer group health insurance that offers few options, Medicare offers a variety of options. Many people feel overwhelmed by the number of plans available. There’s Original Medicare (Part A and Part B), Supplements (Medigap), Prescription Drug coverage plans, and Medicare Advantage plans. You may have hundreds from which to choose!

However, having so many Medicare plan options means you can truly customize your coverage. Compared to your employer group coverage that offers few options, Medicare isn’t one-size-fits-all. You can choose a plan based on your needs and budget, rather than your employer’s.

Do you need Medicare if you have employer coverage?

If you are turning 65 or already over age 65 and receive health insurance coverage from your employer, you still need to take several important steps to avoid incurring a penalty when you enroll in Medicare. Not taking the right steps on time could lead to unpleasant surprises like lifetime penalties, periods without health coverage, and even insurance claim issues.

The necessary steps depend on your age, if you have a qualifying disability, or if you have retiree or COBRA coverage. Your requirements for enrolling in a Medicare plan at age 65 may also be impacted by the size of your employer and the plans available through your employer.

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We'll compare your employer plan to Medicare.

With RetireMed, you have a team of experts available to give you no-cost, local help with health insurance options. Let us do the heavy lifting. Our advisors will compare your employer group coverage to Medicare to see which makes the most sense. We research plans and explain your options so that you feel confident in your plan choice. If you have a spouse who needs an individual health insurance plan or Medicare coverage, we can help with that, too.

Consider new and improved Medicare benefits.

As you weigh your Medicare options, consider the benefits you can access once you make the switch. Some Medicare plans offer affordable out-of-pocket costs coupled with perks such as:

  • Grocery gift cards
  • Allowances for over-the-counter products
  •  Fitness memberships
  • Flexible spending cards to use on dental, vision, and hearing
  • Transportation and meal services

Keep your HSA in mind.

Does your current health insurance come with a health savings account (HSA)? Then you’ll need to be mindful of when to stop depositing funds. You're not eligible to make contributions to your HSA after you have Medicare.

If you apply for Medicare prior to your 65th birthday month, you can contribute to your HSA up to the month before your Medicare effective date. If you’re 65 or older, your Medicare Part A coverage will begin up to six months back from the date you apply for Medicare. If your Part A coverage overlaps when you make contributions to your HSA, you’ll have to pay a tax penalty. The total amount deposited for the year in which you start Medicare should be prorated to include only the number of months not enrolled in Medicare.

Once you’re on a Medicare plan, you can still use your existing HSA funds to cover certain health care costs. You won’t lose your HSA funds by switching to Medicare. Learn more about Medicare and HSAs here.

What if you are working past 65 and receiving Social Security benefits?

If you are 65 and older and have been employed for at least 10 years while paying Medicare taxes, and you have been receiving Social Security benefit checks, you will automatically be enrolled in Medicare Part A and B, even if you choose to continue to work. If you only want Part A, you would need to take additional steps to enroll and refuse Part B. RetireMed’s advisors can help walk you through these steps and options as they are dependent on your unique situation and could have penalty implications if not navigated appropriately.

Medicare vs. COBRA

The Consolidated Omnibus Budget Reconciliation Act (COBRA) allows individuals who are no longer employed to maintain employer-provided health coverage for 18 – 36 months. However, enrolling in COBRA can be rather expensive as those who utilize COBRA as their health care plan may be required to pay up to the employer’s full cost, plus an additional two percent.

While the general guidelines surrounding COBRA eligibility seem straightforward, there are additional rules and exceptions for individuals who are 65 and older and find themselves without a job but are not yet retired. Read more here.

Get local advice about health coverage while you're still working.

Deciding when to enroll in Medicare is a big decision. Whether you’re curious about plan options, enrollment deadlines, or what to do with your HSA funds, our advisors are here to help. Talk with us to learn more about what you can gain when you enroll in Medicare without retiring.

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