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Medicare | Working Past 65 Checklist

Navigating Medicare and Retirement Planning

As you approach or surpass the milestone age of 65 and remain in the workforce, it’s important to make informed decisions about your healthcare coverage. This guide offers tips for navigating the interplay between employment benefits and Medicare, as well as providing clear answers to common questions that arise during this important transition.

Start researching your Medicare options at least 6 months before your 65th birthday.

Engaging with your Medicare options early ensures you make informed decisions without rushing. The process can be complex, and understanding it is crucial for your healthcare and financial well-being.

Determine if you need to enroll or if you can delay.

  • Check Employment Status: If you’re still employed and have “creditable” employer coverage, you may be able to delay Part B without penalty.
  • Assess Your Coverage: If your employer has fewer than 20 employees, you should enroll in Part B when you’re first eligible to avoid late enrollment penalties.

Find out your Initial Enrollment Period (IEP) dates.

  • IEP Timeline:
    • 3 months before 65th birthday: Enrollment starts
    • 65th birthday month: Enrollment continues
    • 3 months after 65th birthday: Enrollment ends
      * If your birthday falls on the 1st day of the month, your IEP shifts one month earlier.
  • Mark Your Calendar: Enter these dates in your calendar to avoid missing the IEP and facing late enrollment fees.

Communicate with your employer’s benefits administrator

When approaching retirement age, it is crucial to understand how your decision to work past 65 can affect your Medicare options, as well as the implications for your dependents. Discuss with your employer’s benefits administrator to make informed decisions.

How Medicare works with your employer coverage could impact your spouse/dependents.

Your employer’s benefits administrator provides insight into how opting for Medicare may interact with your existing employer coverage. Ask specifically about:

  • Whether Medicare will be your primary or secondary insurance.
  • Potential changes in coverage for your spouse and dependents, as this can affect their healthcare services and costs.

Make sure to also inquire about the potential consequences if you choose to delay Medicare Part B enrollment.

If retiree coverage is available and how it may work for you and your spouse/dependents.

Retiree coverage can provide ongoing benefits after leaving a job. Clarify the following:

  • Eligibility for retiree coverage for yourself and your family.
  • How retiree coverage coordinates with Medicare and what benefits it includes.

This information can significantly influence your decision on whether or not to elect Medicare upon turning 65.

How your spouse/dependents may be impacted if you drop the employer coverage. Are they eligible for COBRA?

Dropping employer coverage has a ripple effect. Find out:

  • Your spouse and dependents’ eligibility for COBRA continuation coverage.
  • Duration of COBRA coverage and associated costs.

This is essential for ensuring that your family has uninterrupted healthcare coverage.

Keep Records and Copies of Your Health Insurance for Proof of Creditable Drug Coverage

When you continue working past the age of 65, maintaining accurate records of your health insurance is vital, particularly concerning proof of creditable drug coverage. This is to ensure that when you eventually decide to enroll in Medicare, you won’t be subject to late enrollment penalties.

  • What to Keep:
    • Documentation of your current prescription drug coverage
    • Notices about your prescription drug coverage called “Creditable Coverage” letters
    • Documents that verify the start and end dates of any health coverage you have

To organize your documents effectively:

  1. Create a Dedicated File: Store all health insurance documents in a labeled and secure location.
  2. Track Coverage Dates: Document the period your insurance covers; include precise start and end dates.
  3. Preserve Creditable Coverage Letters: Insurers provide proof each year that your coverage is creditable. Secure these letters immediately upon receipt.

For Proof of Coverage:

  • Request written confirmation from your insurer or employer demonstrating that your drug plan is creditable.
  • Maintain originals and generate copies for backup.
  • Include policy numbers and contact details of the insurance provider on all records.

Remember, creditable drug coverage must be at least as good as the standard Medicare prescription drug coverage. Keeping comprehensive records is your responsibility and is necessary should you apply for Medicare Part D in the future. Failure to provide proof may lead to penalties, so take proactive steps to safeguard all relevant insurance documents.

Understand how Medicare works with HSAs and COBRA

If you’re working past 65, it’s essential to grasp how Medicare interacts with Health Savings Accounts (HSAs) and the Consolidated Omnibus Budget Reconciliation Act (COBRA) coverage.

Can I have an HSA and Medicare?

  • You cannot contribute to a Health Savings Account (HSA) once you are enrolled in Medicare, including Part A.
  • If you want to continue contributing to an HSA, you would have to delay enrolling in Medicare to avoid IRS penalties.
  • Keep in mind that enrollment in Social Security benefits will automatically trigger Medicare Part A enrollment.

How do COBRA and Medicare work?

  • COBRA allows you to extend your employer-sponsored health insurance for a limited time after leaving a job.
  • If you have COBRA coverage and then become eligible for Medicare, your COBRA may end or become secondary to Medicare.
  • It’s important to sign up for Medicare Part B as soon as you’re eligible, even if you have COBRA, to avoid late enrollment penalties.

Key takeaways:

  • Stop HSA contributions before enrolling in Medicare.
  • Enroll in Medicare on time, despite having COBRA coverage, to avoid penalties.
  • Know that Medicare will generally be primary to COBRA coverage.

Learn about the Special Enrollment Period for people working past 65 and understand what you will need to do to avoid late enrollment penalties.

When you turn 65 and are still employed with health insurance through your job, you’re entitled to a Special Enrollment Period (SEP) to sign up for Medicare without penalty. Your SEP begins the month after your employment ends or the month after your group health insurance based on the current employment ends, whichever happens first. You have an 8-month period to sign up for Medicare Part B without facing a late enrollment penalty. You only have 63 DAYS to enroll in Medicare Part D without a late enrollment penalty.

  • Step 1: Check with your employer’s benefits administrator to ensure that your current coverage qualifies you for SEP. It’s critical that your employer’s plan is considered “creditable coverage”.
  • Step 2: Understand the timing. The SEP does not start until after you or your spouse (or family member if you’re disabled) stops working or you lose your employer-provided health insurance.
  • Step 3: Gather necessary documents proving your employment and the health coverage that delayed your Medicare enrollment. This will be needed when you apply for Medicare.
  • Step 4: Contact the Social Security Administration to apply for Medicare Part B during your SEP. You can enroll online, over the phone, or by visiting a local SSA office.

When you apply:

  1. Inform them that you’re applying because you were still working and had coverage.
  2. Provide your employment and health insurance documentation.

Be proactive and plan ahead to avoid delays. If you miss your SEP, you may have to wait until the General Enrollment Period (JANUARY 1st to MARCH 31st annually) and could incur late penalties.

Commonly asked questions and answers

When working past 65, navigating Medicare enrollment is crucial. Understanding how it interacts with other types of coverage, like your spouse’s plan or employer coverage, will help you make informed decisions and potentially save on costs.

I’m covered by my spouse’s employer health plan; do I need to get Medicare?

If you are covered by your spouse’s employer health plan and the employer has 20 or more employees, you may delay enrolling in Medicare until that coverage ends. However, you should probably sign up for Medicare Part A since it is premium-free for most people and may cover some costs not covered by the employer plan.

How will Medicare work with my employer coverage?

Medicare will coordinate with your employer coverage, which can either be primary or secondary. If your company has fewer than 20 employees, Medicare will generally be primary. For larger companies, your employer coverage is often the primary payer. Understanding this coordination of coverage can help you avoid unexpected bills.

Do I have to tell Medicare I want to delay enrolling?

Yes ─ you must inform Medicare if you choose to delay Part B enrollment. Provide evidence of employer or union coverage when enrolling later to avoid late enrollment penalties. It’s advisable to check with Social Security or a Medicare representative for specific instructions on how to document your coverage decision.

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