Reaching the age of 65 is often synonymous with Medicare eligibility, a milestone that might mark the beginning of retirement and new healthcare coverage for many Americans. However, what if you're still actively working for an employer that provides group benefits when you turn 65? Understanding your options and obligations under these circumstances is crucial to ensuring seamless healthcare coverage. 

You Might Be Able to Delay Your Enrollment

Generally speaking, we’re required to enroll in Medicare at age 65 or else pay a penalty in the form of higher premiums later. But if you're still employed at age 65 and your employer offers creditable coverage under a group benefits plan, you may have the option to delay Medicare Part A and/or Part B enrollment without facing penalties. 

However, there are several factors to consider when deciding whether to defer your enrollment. 

Size of Employer. As mentioned, if your employer has 20 or more employees, you generally have the option to delay Medicare enrollment without penalty. Your employer-sponsored plan remains your primary coverage, providing comprehensive healthcare benefits. You might choose to enroll in Medicare Part A (or hospitalization coverage) because it’s free to most people anyway. Part B (for which you will pay a premium) is optional, but you can utilize it as secondary coverage if you wish. 

If your employer has fewer than 20 employees or if your employer does not offer group health benefits at all, you will be required to enroll in Medicare. However, you might be able to remain on your employer’s plan and utilize it as secondary coverage. 

Coverage and Costs. Evaluate the coverage and costs offered by your employer's plan compared to Medicare. Consider factors such as premiums, deductibles, co-payments, and coverage for services not typically covered by Medicare, such as dental and vision care.

Coordination of Benefits. Determine how your employer's plan coordinates with Medicare if you choose to enroll in both. Understanding which plan pays first (primary) and which pays second (secondary) can help you maximize your benefits and minimize out-of-pocket expenses.

Enrollment Periods.  Keep in mind that you have a window of opportunity to enroll in Medicare without penalties, known as the Initial Enrollment Period (IEP). This period begins three months before your 65th birthday, includes the month of your birthday, and extends for three months afterward. If you miss your IEP, you may face late enrollment penalties unless you qualify for a Special Enrollment Period (SEP).

Your Health Savings Account. If you pair a health savings account with your employer’s group healthcare plan, continuing to contribute to that account can equal some tax savings. Your HSA also allows you to roll over unused funds each year, so it can function as another way to save for future healthcare expenses. 

Consider Options Carefully

Healthcare can represent a big decision that significantly impacts your finances. Assessing your options and understanding the implications of your decisions can help you make informed choices that best meet your healthcare needs and financial circumstances. If you have questions or need assistance in navigating this process, consult with us at Bay Area Health Insurance as your 65th birthday approaches. We can help you understand the rules that apply to your situation, and together we’ll shop for Medicare plans if you need to enroll.