The initial enrollment period for Medicare enrollment is the 7-month window beginning 3 months before your 65th birthday, the month of your 65th birthday, and the 3 months after your 65th birthday. It is an important window because missing it can result in missing coverage during the delay and higher premiums for life. But what should you do if you are still working when you turn 65? Should you still enroll for Medicare and begin paying Medicare premiums if you are still working? The answer of course is ‘it depends’. If you are still working at age 65 here are some things to consider.
The first thing to realize is that you are not required to file for Medicare if you are still working and covered by your employer’s health insurance plan that covers 20 or more employees. In this situation you may delay Medicare enrollment until retirement and enroll during a Special Enrollment period that lasts for 2 months after your existing coverage ends. A good rule of thumb is this:
If retiring before 65: Must enroll in Medicare at Age 65
If retiring after 65: Must enroll in Medicare at retirement
The key message here is that you should immediately enroll in Medicare if you are retiring past the age of 65. Delays, such as going on COBRA, could be costly. So, if you are working and still covered by your employer’s plan, are there situations where you would want to go on to Medicare. Possibly.
First, note that the employer plan must be a group plan covering 20 or more employees. If you work for a small business, your employer’s plan may not qualify and thus you may still be required to file for Medicare.
Secondly, you may want to compare the cost of your current insurance with the cost of Medicare and a Medi-gap policy. If your employer is not subsidizing (much) of the cost of your existing insurance, transitioning to Medicare could lower your overall cost. When you do this cost comparison remember that Medicare is not free. Medicare premiums start at $164.90 per month for joint filers with income of $194,000 or less and rise through several brackets to a maximum of $560.50 for those making 750,000 or more. Also remember that Medicare coverage is not enough. We recommend a Medigap policy to supplement Medicare coverage. Costs vary but often run about $250 per month.
If you would like to discuss the specifics of your situation, please feel free to give us a call.