The numbers of Americans who are working beyond 65 are increasing. Since many of these workers are covered by healthcare plans at their jobs, it causes many of them to wonder if they need to file for Medicare part B. In this video I clearly lay out who does, and does not, need to file for Medicare at 65.
TRANSCRIPT OF VIDEO BELOW
If you’re still working at 65, are you required to enroll in Medicare Part B? That’s what we’re going to cover in today’s video.
Over the last decade or so, the number of individuals have doubled who are over the age of 65 and still working. This has caused a lot of them to ask the question, “Do I need to enroll in Medicare even if I’m working?” What drives this question is the well-publicized seven month initial enrollment period and the corresponding penalty that goes with that. Normally you have a seven month window that you can enroll in Medicare Part B, three months before your birthday, the month of your birthday, and three months after your birthday. Many of these individuals are really afraid of the penalty if they miss their enrollment. If you’re required to enroll and you don’t, the penalties can add up very quickly. For every year you don’t enroll, there will be a 10% penalty added to your Part B premium.
For example, if you are three years late enrolling, you’ll have to pay a 30% premium for as long as you have Part B coverage, which is likely the rest of your life. For individuals who are already receiving Social Security benefits, enrollment is automatic. There’s no action you need to take. If you are not receiving Social Security benefits, you will not automatically be enrolled in Part A and B. So this leaves a segment of 65 year olds wondering what they need to do. They weren’t automatically enrolled so is there action they need to take? It comes down to a couple of factors. One, are you covered by a health insurance plan at your job and two, if you are covered by a health insurance plan, how many employees does your company have. And just know, the hinge point on this is 20 employees.
Let’s go through a quick flowchart as an example.
If your company has less than 20 employees, then you are required to enroll in Medicare and your company healthcare will become secondary to Medicare if you chose to keep it. If your company has 20 or more employees, you are not required to enroll in Medicare. So there are a couple of follow up questions that I often receive when I’m talking about this. One is, “Won’t Part B serve as a secondary insurance?” The answer is yes, but it may not be worth the premium. First, it will only cover the expenses that it would if it were a standalone policy. It’s not an insurance policy that pays for what’s left over from your company health insurance plan. Second, you don’t want to waste your initial enrollment period. This is because your Medi-Gap or supplemental plan has an initial open enrollment period that goes for six months from when you sign up for Part B. During that time you cannot be turned down due to health reasons and your premiums will be the same as everyone else. If you miss this window and try to get coverage after the six month window, your health status will be considered and premiums can be very high and expensive. So it could make sense to save your initial enrollment period in case a health issue comes up.
Another question that I often receive is, “Since Medicare Part A is free, shouldn’t I just go ahead and sign up for that?” Well, it’s probably a good idea to go ahead and sign up for Part A even if you aren’t required to. It is free. The one time when you don’t want to do this is if you’re contributing to a health savings account. Since Medicare is not considered a high deductible health plan, you will no longer be eligible to participate in an HSA if you are also on any version of Medicare.
I hope this video clears things up for you and now you understand who is and who is not required to enroll for Medicare at age 65.
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