This is a great article about the pros and cons of signing up for Medicare at 65 if you are still working. Thanks Benefit Pros!
For most Americans, Medicare coverage starts at age 65, at which time every covered person qualifies for Part A, which pays most hospital costs. The vast majority of 65-year-olds also choose to pay a premium (currently $104.90 per month for most people) for Part B. Getting the “Medicare card,” which documents coverage in Parts A and B, is a prerequisite for choosing the rest of the retirement health care safety net including Part C (Medicare Advantage), Part D (Prescription Drug coverage), and Medigap supplemental insurance.
There can be a significant disadvantage to not paying the Part B premium starting at age 65 – namely, the premium can automatically increase by 10% for each year of delay.
However, before advising all clients to begin Medicare at age 65, you should be aware of an important exception. If the client continues to work and has employer-provided health care coverage at age 65, there is no need to enroll in Medicare and pay the Part B premium. If there is overlapping coverage (employer health insurance and Medicare) and if the employer has more than 20 employees, the employer-provided plan generally pays claims first, ahead of Medicare. So, Medicare coverage becomes redundant.
Recognizing this, the federal government allows a person who continues working after age 65 to sign up for Part B at any time that there is employer-provided health insurance, without being subject to the 10% annual Part B premium increase.
Some companies offer their retired workers retiree health insurance coverage or COBRA coverage. It’s important to note that these do not qualify for the exception to the Part B delay. The coverage must be in the employer’s regular health insurance plan for active workers.
If Part B is declined at age 65, there is no need to notify Medicare. However, there also is a procedure that people who keep working after age 65 should follow, at the time they either stop work or choose to start Part B coverage, to prove to Medicare that they’ve had valid employer-provided health insurance.
Within eight months after ending employment, the worker must file with Medicare twoforms, an Application for Enrollment in Part B and a Request for Employment Information, which verifies that employment continued beyond age 65.
To avoid the 10% annual increase, which can be retroactive back to age 65, these forms must be filed within eight months after employment ends, even if the retiring worker chooses to extend employer coverage under COBRA. Medicare has summarized the procedure.
When your clients are approaching age 65 and still working, it’s a good idea to evaluate healthcare options several months before the 65th birthday. In some cases clients may want to stop paying out-of-pocket premiums for employer coverage and choose Medicare instead. In other cases they can avoid premiums for Parts B, C, D and Medigap by continuing employer coverage as long as they keep working – and then proving to Medicare that work and employer coverage continued after age 65.
Additionally, if you are on highly subsidized health insurance plans, your costs may go up significantly! Always best to talk to an independent health insurance agent first to review all your option
Reprint courtesy of :
Benefits Pro (www.benefitspro.com/2016 Aug 31, 2016 | By Rich White