When to Enroll in Medicare

Navigating when to enroll in Medicare can be one of the most perplexing decisions. Here’s a guide to help you determine the best time to enroll in Medicare based on your circumstances. ​​

 

Enrolling in Medicare Before Age 65

To qualify for Medicare before 65, you must be disabled. In this case, beneficiaries receive Part A immediately, followed by Part B after 24 months.
 

Enrolling in Medicare at Age 65

Most people sign up for Medicare at age 65, but some may choose to continue working and stay on their employer's health insurance.

Without Employer Group Health Insurance

If you don’t have employer group health insurance, enrolling in Medicare is straightforward. Your Initial Enrollment Period (IEP) is a 7-month window that spans 3 months before and 3 months after the month you turn 65.

 

Example Scenario: Initial Enrollment Period at Age 65

• Individual: John turns 65 on November 15, 2024.

• Earliest Medicare Start Date: The first day of his birth month, November 1, 2024.

• IEP Start Date: August 1, 2024 (3 months before November 1, 2024).

• IEP End Date: February 1, 2025 (3 months after November 1, 2024).

• If John enrolls before November 1, 2024 (recommended): His Medicare coverage will begin on November 1, 2024.

• If John enrolls between November 2, 2024, and February 1, 2025: His coverage will start on the first day of the month following his enrollment. 

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Special Rule:
If your birthday falls on the 1st of the month, Medicare starts on the 1st of the prior month.
 

Example: Michael turns 65 on October 1, 2024. His Medicare starts September 1, 2024.

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Continuing to Work

The rules for signing up for Medicare while continuing to work depend on the size of your employer’s health plan:

Small Employer with fewer than 20 employees
Medicare is primary, and employer coverage is secondary.
You need to take Medicare Parts A and B.

Large Employer with 20 or more employees

Employer coverage is primary, and Medicare is secondary.

You can delay all parts of Medicare past 65 if you have creditable employer coverage

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Enrolling in Medicare After Age 65​

If you continue working past age 65 and retire later, you must enroll in Medicare once you lose your employer’s health coverage. Your Initial Enrollment Period functions similarly to starting Medicare at 65 but is based on when your employer coverage ends.

 

Example Scenario: Initial Enrollment Period After Age 65

Individual: Elliot is retiring and losing employer coverage on June 30, 2023.
Earliest Medicare Start Date: July 1, 2023.
IEP Start Date: April 1, 2023 (3 months before July 1).
IEP End Date: October 1, 2023 (3 months after July 1).
If Elliot enrolls before July 1 (recommended): His Medicare coverage will begin on July 1.
If Elliot enrolls between July 2 and October 1: His coverage will start on the first day of the month following his enrollment.

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Health Savings Accounts (HSA) and Medicare Enrollment

 

Be mindful of when to stop HSA contributions based on your Medicare enrollment timing.

After enrolling in Medicare, you can no longer contribute to your Health Savings Account (HSA). This is because Medicare disqualifies you from making HSA contributions. To avoid tax penalties, you and your employer should stop HSA contributions at least six months before your Medicare start date. This precaution accounts for Medicare Part A’s retroactive coverage, which can go back up to six months from when your Medicare coverage begins. While you can’t make new contributions once you have Medicare, you can still use the funds already in your HSA to pay for qualified medical expenses. 

 

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FAQ

 

What Happens If I Don't Enroll in Medicare?
If you don’t enroll in Medicare and lack other creditable health insurance coverage, you will incur a lifetime penalty when you eventually sign up.

Delaying Medicare Enrollment?
If you have creditable health insurance coverage, such as through an employer, it often makes sense to delay enrolling in Medicare. When you enroll later, you should not face any penalties as long as your coverage is deemed creditable.

Working Past Age 65?
If you continue working past age 65 and have creditable coverage from your employer, you won’t be penalized for delaying Medicare Part B enrollment. It’s important to ensure your employer’s plan is considered creditable to avoid future penalties.

Choosing Between Employer Insurance and Medicare?
Deciding whether to keep your employer group insurance or switch to Medicare requires a cost-benefit analysis. Compare the total costs, deductibles, and co-pays of both options. Note that Medicare often has lower deductibles, which can significantly impact your decision.

COBRA Coverage and Medicare?
COBRA allows you to continue your employer health insurance after you leave your job, but it is not considered creditable coverage for Medicare. If you delay enrolling in Medicare because you have COBRA, you may face penalties when you eventually sign up for Medicare. It’s generally advisable to enroll in Medicare when you first become eligible, even if you have COBRA, to avoid these penalties and ensure continuous coverage.

Can My Employer Pay My Medicare Part B Premium?
Generally, employers cannot directly pay your Medicare Part B premiums. However, they can set up a Section 105 Medical Reimbursement Plan. This plan allows them to allocate funds for employees' health insurance, including Medicare Part B, dental insurance, and other medical expenses. A common type of Section 105 plan is a Health Reimbursement Arrangement (HRA), which reimburses employees for individual health insurance premiums and qualified medical expenses.

Can My Employer Pay My Medigap Premium?
While having your employer pay for your Medigap plan might seem appealing, it typically violates CMS rules if done individually. If you opt out of your employer’s group insurance for Medicare as primary, the employer cannot pay for your Medigap premiums individually. However, a Section 105 reimbursement plan for the entire group can allow reimbursement for Medicare Parts A and B as well as Medigap plans.

Can My Employer Remove Me from Group Health Insurance When I Turn 65?
It is illegal for an employer to force an actively working employee to switch to Medicare and leave the group health plan. You have the option to choose Medicare as your primary insurance, but the decision is yours. For retiree coverage from a former employer, the company is not required to provide health insurance once you turn 65. If they do offer coverage, it will likely change, with Medicare becoming primary and the retiree plan secondary.

Can I Enroll in a Medigap Plan if I Have Employer Coverage?
Enrolling in a Medigap plan while having large employer coverage is unnecessary because Medigap only pays if Medicare is primary. Insurance companies might reject your Medigap application if you are still employed and covered by a large group plan since it wouldn’t be useful.

Retiree Coverage
If your former employer offers retiree coverage after you stop working, Medicare will be primary. Evaluate the costs and benefits of maintaining retiree coverage. If costs are high, switching to a Medigap and Part D drug plan might be more cost-effective.

 

Opting Out of Medicare You are not required to sign up for Medicare if you don’t want it. Even if you are currently enrolled, you can cancel your Medicare coverage. However, if you do not have other creditable health insurance, you will face penalties if you decide to enroll in Medicare in the future.


Understanding these aspects of Medicare and employer coverage will help you make informed decisions about your healthcare options.

 

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