When to sign up for Medicare if you're still working

When should you sign up for Medicare?

Navigating Medicare while you or your spouse is still employed can seem daunting, but it doesn’t have to be. Many people assume that if they already have health insurance coverage through work when they turn 65, they don’t need to worry about Medicare enrollment until retirement. But that’s not always the case.

The good news is that Medicare can work with your employer-sponsored health insurance. But you should review your employer’s benefits package and talk to your HR department to see how Medicare could affect your coverage. As you consider your options, let’s discuss some Medicare basics before we dig into the details.

Understanding Medicare Part A and Part B: What's covered?

Medicare is provided by the U.S. government and has multiple parts; the core program, known as Original Medicare, consists of Part A and Part B.

• Medicare Part A is hospital insurance that helps cover the cost of inpatient care in hospitals, skilled nursing facilities, hospice care and home health care. You're automatically enrolled in Part A if you're already receiving Social Security benefits. Otherwise, you’ll need to enroll on your own. Most people receive premium-free Part A due to paying Medicare taxes while working.
• Medicare Part B helps pay for doctor visits, outpatient care like rehab therapy andsome preventative services. You’re eligible for Part B as soon as you become eligible for Part A, but Part B is voluntary, though required under some plans such as TRICARE for Life, and has a monthly premium. Many people with Part A also enroll in Part B to make sure their basic health needs are covered.

Group health plans: Your bridge to Medicare?

Working past 65? If you’re covered under an employer group health plan, you can usually delay signing up for Medicare Part A or Part B if you meet the right conditions. If you have to pay premiums for Medicare Part A or Part B, the option to delay Medicare can save you money.

Should I sign up for Medicare Part A while employed?

Yes, you’ll usually want to enroll in Medicare Part A as soon as you’re eligible. Most likely you’ve paid enough into Medicare during your working years, so you can sign up for Part A without paying a premium. This is one reason enrollment is still encouraged if you’re employed. You may be able to delay Medicare Part A enrollment if you meet the proper conditionsOpens in a New Window.‍ ‍

Should I sign up for Medicare Part B while employed?

There’s more to consider when it comes to Part B, but the bottom line is that if you’re covered under an employer-sponsored group plan, you may be able to delay enrollment in Part B as long as the health insurance plan through your employer meets Medicare’s criteria. That also delays the need to pay the Part B premium, saving you money.

Generally, if you have qualifying health insurance through your employer, you can delay Medicare Part B enrollment until you stop working, and you won’t pay a late enrollment penalty. But be sure to check with your employer’s benefits coordinator, as not all employer plans qualify. Some plans require you to sign up for Medicare Part A and Part B when you turn 65 or you might lose your job-based coverage. To learn more about how Medicare might work with your employer-sponsored insurance, go to medicare.govOpens in a New Window.‍ ‍ If you retired from uniformed service, and plan to enroll in TRICARE for Life, you will be required to enroll in Parts A and B regardless of any civilian employment that may continue.

What if I’m covered by my spouse’s insurance?

If you’re listed as a dependent under your spouse’s employer-provided health insurance, you have the same options you’d have if you were under a plan offered by your own employer:

• Enroll in Original Medicare when you turn 65.
• Enroll only in Medicare Part A when you turn 65.
• Delay Medicare until you lose your current coverage.

Deciding when to enroll: Weighing your options

To enroll, or not to enroll? That’s a question you may be asking yourself as you approach your Medicare enrollment decision while still covered under a group plan.

Benefits of enrollment: Avoiding penalties or gaps in coverage

Whether employed or not, enrolling in Medicare during the initial enrollment period means you don’t have to pay a fine or worry about navigating the special enrollment period. It also makes sure that you have the coverage available to meet your needs. But it’s not always this cut and dry.

If you’re enrolled in a high-deductible health plan, you may have a health savings account, or HSA. If so, you must stop contributing to your HSA once your Medicare coverage begins. If you delay enrolling in Medicare past age 65, Part A coverage can be retroactive for up to six months, so it’s generally advisable to stop HSA contributions several months before applying to avoid potential tax penalties.

Special enrollment periods: Navigating job changes and coverage issues

If you delayed enrolling in Medicare because you had coverage through you or your spouse's current employer, you may qualify for a Special Enrollment Period, or SEP, when that coverage ends. In most cases, you have eight months to enroll in Medicare (or add Part B), starting the month after your employment or coverage ends, whichever comes first. Your coverage typically begins the first day of the month after you enroll. If you had qualifying employer coverage, you generally won’t pay a penalty for enrolling during this period; however, this SEP applies only to coverage based on current employment. Different enrollment rules apply for individuals eligible due to end-stage renal disease.

Making your choice: Resources and next steps

Compare Medicare options, including Original Medicare and Medicare Advantage, to determine which best fits your health care needs and budget. Reviewing prescription drug costs can help you decide whether to enroll in a standalone Part D plan or a Medicare Advantage plan that includes drug coverage, and comparing premiums and out-of-pocket costs can help clarify tradeoffs. Consulting plan materials or a licensed advisor may help you understand how different options apply to your situation.