by Dan Tuchmann

I’m turning 65 but still plan to work, Do I need to enroll in Medicare?

Many people keep working well beyond age 65. If your employer offers health coverage, do you need to enroll in Medicare? What about Medicare’s prescription drug benefit?

Most workers probably should enroll in Medicare Part A, which is free for most people and covers institutional care in hospitals and skilled nursing facilities, as well as certain care given by home health agencies and care provided in hospices. 

Medicare Part B, which covers outpatient and preventative care like doctor visits and tests, has a monthly premium that changes each year (it is $134.00 a month in 2017).  Individuals who don’t sign up for Part B when they first become eligible can pay a 10 percent premium penalty for each year that enrollment is delayed. However, there is an exception.

Whether you should enroll in Part B while you are still working depends on how many people work for your employer. If your employer has 20 or more employees, you do not need to sign up for Part B right away because your employer’s group health plan will be the primary insurer. When you retire, you will have a special enrollment period of eight months to sign up for Part B, without penalty.

If your employer has fewer than 20 employees, however, you should enroll in Medicare Part B when you are first eligible. Medicare is the primary insurer, which means it pays before your employer’s insurance pays. If you don’t enroll, your employer’s plan can refuse to cover you for services that Medicare would have covered. That means that you may have to pay for those services out of your own pocket. Before making a decision about Medicare Part B, you should always contact Social Security by dialing 800-772-1213, visiting your local Social Security office or reaching out to Thomas & Associates your Medicare planning experts.

Medicare Part D covers prescription drugs. Even if you choose not to enroll in Medicare Part B, you can still enroll in Part D, and doing so may be advisable to avoid a late-enrollment penalty like the one for Part B. If you already have prescription drug coverage through your employer, your insurance plan should send you a letter telling you whether the company’s coverage is “creditable” — meaning it is equal to or better than what Medicare is offering. If it is “creditable,” then you won’t have to pay a late-enrollment penalty if you decide to switch to Medicare Part D later.

Also, if you are already covered by your company’s drug plan, a Medicare plan may not be right for you. Don’t sign up until you compare your current plan with the Medicare plans available in your area.  Finally, before you sign up for a drug plan, ask your employer if you can drop your drug coverage without losing your other supplemental insurance. Once that insurance is gone, you may not be able to get it back.