Ask The Medicare Specialist

Do I have to enroll in Medicare when I turn 65 if I’m still working? Are there penalties for not doing so? Who should and shouldn’t enroll in Medicare Part B?

Anyone turning 65 who isn’t getting health insurance from their own or spouse’s employer needs to enroll in both Medicare Parts A and B.

Those who are already collecting Social Security prior to turning 65 don’t have to apply for Medicare. A card with both Parts A and B will automatically come in the mail about 115 days prior to the month one turns 65.

Those who aren’t collecting can apply as soon as three months prior to the first day of the month of their 65^th birthday, which is also when Medicare can go into effect. For example, someone who has a birthday anytime in October can apply as soon as July 1^st for a Part A and B effective date of October 1^st. I really do recommend doing that as early as possible because it takes close to 30 days to receive a Medicare card and the claim number that’s issued is needed to enroll in an Advantage Plan or Supplement, the two choices you have to limit out of pocket costs versus what Original Medicare pays.

The easiest way to enroll is on Social Security’s website, SSA.gov. An account must be created first, but once that’s done the application is pretty straightforward and only takes 15 minutes or so to complete. Those who don’t want to apply online can do that in person at any Social Security office. However, be advised that you do need an appointment and there may be a wait of up to 45 days for an opening. So, plan accordingly and reach out to Social Security well before the first day you’re able to enroll. Some offices don’t answer their phone, and you may have to walk into a branch to set up your appointment.

It’s not necessary to enroll in Part B at age 65 when one is getting health insurance through their own or a spouse’s employer. And in this case, when opting out, there are no late enrollment penalties, the details of which I’ll explain shortly. In addition, people on employer plans can enroll in Part B any time of the year when they decide to retire or leave their employer coverage using the form titled “Request for Employment Information.” This document needs to be filled out by the employer providing the insurance and given to Social Security at the time of application for Part B.

However, those who work past 65, or have a spouse that does, should have one of our licensed agents look at plan details and costs to determine if staying on employer coverage or enrolling in Medicare and a Supplement or an Advantage Plan is the better value. Those who are on what are known as HDHQP, high deductible qualified health plans that are paired with an HSA (Health Savings Account) absolutely need to reach out before turning 65! Many will no longer have what Social Security and Medicare consider “creditable drug coverage.” Those who have HDQHPs and fail to enroll in Parts A and D at age 65 may have to pay a late enrollment penalty for Part D that can last a lifetime and cost thousands of dollars! There’s can also be tax implications and possible penalties on HSA contributions made by you or an employer after turning 65.

I estimate that 75% of those we meet who get insurance through an employer are better off remaining on their plan and opting out of Part B. However, some employers only cover half of their cost, which usually makes Medicare the better choice. It’s also not uncommon for an employer to contribute less towards the spouse’s premium than they do for the employee, and in many cases we recommend the employee stay on their work plan and the spouse go on Medicare.

To offset inevitable annual premium increases, employers may be forced to offer plans with higher deductibles and out of pocket costs. These as well as coinsurance and the Maximum Out of Pocket (MOOP) must be considered when deciding to stay on an employer plan or opting into Medicare. It’s important to pay attention when your benefit election period rolls around each year at work. Find out if what will be taken out of your paychecks is going up and/or your exposure to out of pocket medical or prescription expenses has increased! If that’s the case call us to evaluate your options.

Those who are getting free or reduced cost health insurance from a company they retired from should NEVER opt out of Part B! You or your spouse must be “working” to do so without penalty. We have met far too many people, mostly retired teachers, who were given as much as seven years no cost health insurance as an incentive to take early retirement. When that period of free insurance ended, only then did they find out they were going to be forced to pay a $20 to $130 per month Part B late enrollment penalty for the rest of their lives. This is added to the standard Part B premium which is $185/month in 2025.

Be advised, you CAN NOT opt out of Part B and keep a subsidized ACA (Obamacare/Pennie) plan when you’re Medicare eligible! Doing so will not only result in a Part B late enrollment penalty, but you will also be forced to pay back subsidies that were received after turning 65. We’re talking about as much as $7,000 or more.

I also don’t suggest Federal retirees who can get a plan that covers them without Part B opt out. The same holds true for Veterans with VA coverage. There are too many variables and future uncertainties to take that chance.

An agent at The Health Insurance Store can walk you through the process of applying for Medicare A and B as well as confirm if you should or shouldn’t enroll in either. I want to reiterate how important it is to get these choices correct before opting out of either Parts A or B. Do not listen to anyone, including friends or family and even your HR department or Social Security. The wrong advice or information is given far too often!

If you have any questions or would like to set up an appointment for a no cost consultation, please call one of our offices or reach out to me personally at aaron@GetYourBestPlan.com.