Are you unsure if you need to join Medicare when you turn 65?
Most people assume you must join Medicare at 65, but that isn’t completely true.
If you are one of the many people working past 65 and have health insurance through your employer, you may be able to delay enrolling in Medicare without facing penalties. The same can be true if you are on your spouse’s employer’s health insurance.
According to recent data from the U.S. Bureau of Labor Statistics; more than 20 percent of Americans 65 and older continue working. Therefore more people are postponing Medicare.
Medicare Rules
Medicare rules say that once you turn 65 you must either be on Medicare or an acceptable health insurance. If you do not meet this requirement you will face penalties.
To know if you meet the requirement you need to look at three things:
1: Can you stay on your employer’s health insurance plan? Does your employer have certain Medicare rules to stay on the plan?
2: Does the employer providing the health insurance have enough employees to qualify?
3: Is the employer provided prescription plan deemed “creditable”?
To get more detail on these 3 questions and requirements please click here to receive a free guide “How To Delay Your Medicare Enrollment Without Facing Penalties.”
{Note: If you have health insurance through the VA or FEHB different rules may apply. Please contact your health insurance contact to get full details. You will likely need to join Medicare Part A and Part B only.}
There are a few things to consider even if you do not need to join Medicare because you have employer provided insurance.
Leaving the employer plan and joining Medicare
Although you may be able to stay on your employer or your spouse’s employer health insurance plan, you may be better off joining Medicare.
There are a few key factors when trying to decide whether you are better off staying on the employer plan or joining Medicare.
You first need to look at the cost of the employer health insurance plan. This includes looking at premium, deductibles, copays, and max out-of-pocket. Once you have this you can compare it to Medicare. For reference, most of our clients pay between $200 and $300 per month, with low out-of-pocket expenses.
A few months ago, we were helping Dan make his Medicare decision. Dan can stay on his wife’s employer plan. However, the employer plan doesn’t cover all his medications. Since the medications are not covered by the employer insurance, they are too expensive for him to buy on his own. Because of this Dan decided to leave the employer plan and join Medicare. Medicare will be less expensive for him and his family and Medicare will cover all his medications. He can now take all his medicines, see the same doctors, and pay less money.
Next you should look at your health situation. Look at whether you are hitting your employer health insurance deductible and max out-of-pocket.
Finally, you should consider any family members on your employer health insurance. If you leave the plan your family on the plan will likely lose coverage. Therefore it’s critical to take this into consideration when making your decision.
Another client Pat is able to stay on his employer plan which also covers his 63-year-old wife. If he leaves the employer plan his wife loses her coverage. This means she will likely need to get insurance through the Affordable Care Act marketplace. Pat decided not to join Medicare until his wife is 65 so they can both join and not worry about finding her other health insurance.
Staying on your employer plan and joining Medicare Part A only.
Many people who stay on an employer plan decided to join Medicare Part A only.
Part A is hospital insurance. Most people don’t pay an additional fee for Part A because they already paid for it through FICA taxes.
However, if you are contributing to a Health Savings Account (HSA) you will likely want to delay Medicare Part A. Once you join Medicare Part A you are not eligible for the tax benefits through HSA plans.
As you can see joining Medicare is not a straightforward decision, but it is critical that you get it right.
If you have questions and want to talk to a Medicare Coach about your Medicare decision, please sign up for a Clarity Call. In this 30-minute call we will help you understand the options you have so you can make your best decision
Click here to sign up for your Clarity Call
