Working Past 65
If you're approaching 65, planning for health coverage is crucial, especially if you expect to continue working.
Many people are choosing to delay retirement (and Medicare enrollment) past the age of 65. The reasons for doing so can include saving money for retirement, waiting to receive full Social Security benefits, continuing health insurance through their employer, or timing retirement with a spouse.
While delaying Medicare may make sense for some, it's important to enroll in Medicare Part B on time to avoid penalties. Generally, you should enroll at 65 unless you have current coverage through your or your spouse's employer, which may allow you to delay without extra costs.
Find Your Scenario
Finding your scenario is the first step in identifying what coverage is right for you. Below are several situations that those working past 65 may fit into.
Large Employer | 20+ Employees |
Medicare Part B Decisions: Delaying Part B is often a smart move. You avoid unnecessary premiums while you're covered by employer insurance.
Enrolling in Part A: Generally, there's no cost for Part A, to get added hospital coverage.
Coordination of Coverage: Your employer plan usually pays first and Medicare pays second.
Small Business | Under 20 Employees |
Timely Enrollment Required: In smaller companies, Medicare becomes primary coverage. Delaying enrollment could leave you with no primary insurance and high out-of-pocket costs.
Communicating with Employers: Small business often require you to take Medicare at 65. Make sure to ask your employer about how their plan coordinates with Medicare.
Self-Employed |
Timely Enrollment Required: If you're self-employed, enrolling in Medicare at 65 is crucial, especially to avoid Part D penalties.
Balancing Coverage: We can help you understand how Medicare can work best with your current health plan.
COBRA to Medicare |
Timely Enrollment Required: If you're on COBRA when you turn 65, enroll in Medicare right away to avoid coverage gaps and penalties.
Understanding COBRA and Medicare: COBRA often ends when you enroll in Medicare. Having both can result in coverage overlaps.
Stipend-Based Health Insurance |
Understand Medicare Enrollment: Talk to your insurance provider about how a stipend-based insurance plan interacts with Medicare.
Strategic Planning: We can help you understand the ins and outs of enrolling in Medicare on your stipend benefits.
No Employer Health Insurance |
Timely Enrollment Required: Enroll in both Medicare Part A and B to ensure comprehensive coverage and avoid late enrollment penalties.
Exploring Financial Assistance: If cost is a concern, we can guide you through options for assistance.
Health Savings Accounts (HSAs) and Medicare
Once you enroll in Medicare, you can no longer contribute to an HSA. If you're contributing to an HSA and planning to enroll in Medicare, it's important to understand the tax implications of making contributions to your HSA.
Contributions should be stopped at least 6 months before enrolling in Medicare. The IRS considers you retroactively covered by Medicare for the 6 months prior to your enrollment date. If you make HSA contributions during this six month period, you can be charged a tax penalty on those funds and any interest they accrue.
Note: You can still use your accumulated HSA funds for qualified medical expenses, including Medicare premiums (except Medigap).
Strategic use of HSAs
You can still use your accumulated HSA funds for qualified medical expenses, including Medicare premiums (except Medigap).
HSA contributions
Once you enroll in Medicare, you can no longer contribute to an HSA. Contributions should be stopped at least 6 months before enrolling in Medicare. This is because the IRS considers you covered by Medicare for the 6 months prior to your enrollment date, retroactively.
Penalties for Late Enrollment
If you miss signing up for Medicare Part B during your Initial Enrollment Period and don’t qualify for a Special Enrollment Period, you may face a 10% penalty on the Part B premium for each full 12-month period you could have enrolled but didn't.
This penalty is permanent and added to your monthly premium.
If you don’t sign up for Medicare Part D Prescription Drug coverage when first eligible and lack other creditable drug coverage, you’ll face a penalty. This is 1% of the national base premium for each uncovered month and is added to your monthly Part D premium.
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