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Employer Coverage vs. Medicare: 5 Common Questions When Working Past 65

If you are 65 (or older) and still working full-time, chances are that you have questions swirling through your head about health insurance. 

You are probably wondering: "Should I switch to Medicare or stick with my employer group coverage?" "Do I even have to enroll in Medicare?" "What happens if I refuse to sign up for Medicare at 65?"

If you're in this spot, don't worry. Our advisors break it down below, giving you all the info you need to make the right decision. 

Do I have to sign up for Medicare at 65?

You don't have to sign up for Medicare when you turn 65. If you have a group health plan from an employer with 20 or more employees, you have creditable coverage and can choose to sign up for Medicare now or delay it until your employer's coverage ends. 

A special enrollment period exists for eight months after your employer-sponsored coverage ends, during which you can sign up without paying late enrollment penalties. You will get a letter of creditable coverage from your employer's insurance carrier, which you can present as proof of coverage to Medicare. 

Are my employer benefits better than Medicare?

While it is possible for your employee coverage to offer better benefits or lower costs, this is not always the case. In fact, employer's insurance has become more expensive over the past 15 years, with policyholders having to carry a significant share of the costs. Also, if your spouse is eligible and covered under your plan, you may pay a higher percentage of the premium for your spouse. 

That's why it's essential to consider your company's health plan costs and coverage benefits, pitting them against their Medicare equivalent so you can choose the option that meets your needs better. 

Are there scenarios where I have to sign up for Medicare?

If your employer has fewer than 20 employees, the law mandates that Medicare is your primary coverage. At this point, you must sign up for Medicare. Otherwise, your employer plan may refuse to pay until Medicare pays, leaving you with considerable out-of-pocket costs. You could also face penalties when you sign up later, such as paying higher costs for life. 

If you work for a large organization with more than 20 employers, you can delay signing up for Medicare Part B and enroll in Part A (since it is premium-free if you've paid Medicare taxes for at least ten years). 

How do employer coverage and Medicare work together if I have both?

If your company has less than 20 employees and you sign up for Medicare, you will have both Medicare and employer coverage. In this case, Medicare coordinates benefits with your employer insurance, paying first as the primary payer up to its coverage limit. If there are costs Medicare didn't cover, your employer coverage pays some or all of the remaining costs. 

What If I contribute to a Health Savings Account (HSA)?

If you are keeping your employer coverage, you can enroll in Part A during the initial enrollment period, as it costs $0 if you have paid taxes for at least ten years. 

However, if you are contributing to a health savings account (HSA) and will keep doing so, do not sign up for Part A. Otherwise, you can face severe tax implications and face potential penalties. However, if your spouse has coverage on your group plan, they can still contribute in their name if they are not enrolled in Medicare. 

Medicare is complex. Let our advisors guide you toward the right choice

Medicare is complex, and navigating it can be overwhelming. But you don't have to tackle it all alone. 

Our advisors at Silver Crest Insurance are here to answer your questions and help you understand your options, giving you all the information you need to make the right decision that fits your needs. Call us today to get started. 



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