If the employer has 20 or more employees (large employer)
As long as you have group health insurance from an large employer for which you or your spouse actively works after you turn 65, you can delay enrolling in Medicare until the employment ends or the coverage stops (whichever happens first), without incurring any late penalties if you enroll later. When the large employer-tied coverage ends, you’re entitled to a special enrollment period of up to 8 months to sign up for Medicare parts A and B.
- You cannot delay Medicare enrollment without penalty if your large employer-sponsored coverage comes from retiree benefits or COBRA — by definition, these do not count as active employment.
- You (or your spouse) must be actively working for the large employer that currently provides your health insurance in order to delay Medicare enrollment and qualify for a special enrollment period later on.
The law requires an employer with at least 20 employees to offer you (and your spouse) the same benefits that it offers to younger employees (and their spouses). It is entirely your choice (not the employer’s) whether to:
- Accept the employer health plan and delay Medicare enrollment
- Decline the employer coverage and rely wholly on Medicare
- Have the employer coverage and Medicare at the same time
If you enroll in both the large employer group plan and Medicare Part B, be aware of the consequences. In this situation, the employer plan is always primary, meaning that it settles medical bills first and Medicare only pays for services that it covers but the employer plan does not cover. So, unless the employer coverage is very poor, you’d be paying monthly premiums for Medicare with little or no return.
Also, by signing up for Part B while you still have employer coverage, you could be forfeiting your right to buy Medicare supplemental insurance (known as Medigap) with “guaranteed issue” after this employment ends. Insurance companies are prohibited from refusing to sell you a Medigap policy or charge higher premiums based on your health or pre-existing medical conditions, if you buy the policy within six months of enrolling in Part B. Outside of that six-month window, except in very limited circumstances, they can do both.
If the employer has fewer than 20 employees (small employer)
If your small employer requires you to enroll in Medicare, then Medicare becomes primary automatically, and the small employer plan provides secondary coverage. That means Medicare settles your medical bills first, and the group plan only pays for services that it covers but Medicare does not cover.
Also note that you cannot delay signing up for Part A if you already are receiving Social Security benefits and were automatically enrolled in Medicare, even if you’re still working.
I have a health savings account at work. Can I still contribute to my health savings account after I turn 65?
Yes, as long as you haven’t enrolled in Medicare. If you are able to delay signing up for Original Medicare parts A and B (see above), you can continue contributing to an HSA. Before you decide, determine whether the HSA’s tax breaks, any employer contributions and other benefits are more valuable than the premium-free Part A coverage.
Warning for when you retire: You cannot contribute to an HSA in any month that you are enrolled in Medicare. When you finally sign up for Social Security retirement benefits —probably when you’re close to retirement — and if you’re already at least six months beyond your full retirement age (currently 66) Social Security will give you six months of “back pay” in retirement benefits. Unfortunately, this means that your enrollment in Part A will also be backdated by six months. Under IRS rules, that leaves you liable to pay six months of tax penalties on your HSA. To avoid the penalties, simply stop contributing to your account six months before you apply for Social Security retirement benefits.
I have retiree health insurance. Do I need to sign up for Medicare at age 65?
Unless you or your spouse is still actively working and has current employer coverage, you should sign up for Original Medicare (both Part A and Part B) at 65. Retiree coverage can fill gaps in Medicare (which would otherwise require Medigap and Part D policies or a Medicare Advantage plan), but it is secondary to Medicare after age 65, and it may not kick in at all if you don’t sign up for Original Medicare. Federal retiree coverage is an exception; it remains your primary coverage if you don’t sign up for Original Medicare, but you will pay a penalty if you decide to sign up for Part B later.
What’s the penalty for not signing up for Medicare Part B?
You will have to pay a late-enrollment penalty of 10% of the Medicare Part B premium for every year you should have had coverage. The penalty applies as long as you receive Medicare benefits. If you miss the initial enrollment period or the eight-month window after you or your spouse stops working, you can only sign up from January through March in any year for coverage to begin July 1.
Why do I need a plan to supplement my Medicare Part A and Part B?
With Original Medicare (Parts A and B), you still have to pay deductibles and co-payments. Most people buy a Medicare supplement (Medigap) policy to pay those costs, plus Part D prescription-drug coverage because Medicare generally does not cover drugs. Or you can sign up for a private Medicare Advantage plan , which provides both medical and drug coverage, along with additional benefits.
Medicare Advantage plans (Part C) combine medical and drug coverage and may also provide coverage that isn’t available through Original Medicare, such as some coverage for dental, vision, hearing, gym membership, over-the-counter benefits and more. Excellent $0-premium plans are available, which includes Part D prescription drug coverage. These plans usually have co-pays, a network of doctors and hospitals, and you may have higher costs (or no coverage) if you go out of network. You may also need a referral to see a specialist.
My Medigap Plan F has high premiums. Can I switch to another plan to save money?
Maybe. There’s a huge price range for Medicare supplement plans, and you may be able to save by switching. Depending on your health and the state in which you live, your options may be limited. Insurers cannot reject you or charge more because of preexisting conditions if you buy a Medigap policy within six months of signing up for Medicare Part B. But after that, your health can affect your costs and coverage options. Therefore, you may or may not qualify for a better deal with another insurer.
Some insurers will let you switch to a less-comprehensive policy without medical underwriting.
Your state may offer special opportunities to switch, regardless of preexisting conditions. For example, New Yorkers can switch Medigap policies at any time regardless of health. In Missouri, you can switch to another insurer’s version of your plan on your policy anniversary.
The doctor I want to use isn’t covered by my Medicare Advantage plan. When can I switch to a different plan?
You generally can’t switch to another Medicare Advantage plan until the annual enrollment period in the fall, which runs from October 15 to December 7 for the following year January 1st coverage. There are a few exceptions: You can switch plans if you qualify for a special enrollment period, such as if you move to an address that isn’t in your plan’s service area. You can also switch to a Medicare Advantage plan with a five-star quality rating anytime during the year. But there are only a few five-star plans in the U.S.
If you join a Medicare Advantage plan when you are first eligible for Medicare and switch back to traditional Medicare within the first 12 months, you can buy a Medigap policy and a Part D plan within 63 days of the change. Each year, you can switch from Medicare Advantage back to traditional Medicare and get a Part D drug plan during the open enrollment period, which runs currently from January 1 to March 31. But you could be rejected or charged more for Medigap because of a preexisting condition.
At what income level does Medicare charge an Income Related Monthly Adjustment Amount (IRMAA)?
The level at which an IRMAA is charged can change each year. For 2023, if the total of your modified adjusted gross income (MAGI) is more than $97,000 if you’re single or $194,000 if you’re married and filing jointly, you have to pay extra for Part B, depending on your income. You’ll also have to pay an extra amount each month for Part D drug coverage.
The high-income surcharge is based on your last tax return on file. If your income has dropped since then because of certain life-changing events, such as divorce or retirement, you can ask the Social Security Administration to base premiums on your more-recent income by downloading and completing Form SSA-44 and providing documentation. (See the Social Security Administration’s Medicare Premiums: Rules for Higher-Income Beneficiaries)
My doctor prescribed an expensive drug and even with my Part D coverage, I pay a high cost out of pocket. How can I pay less?
First, ask your doctor if you can use a generic drug or a “therapeutic alternative” that costs less under your plan. Make sure you are using a preferred pharmacy (ask your insurer which pharmacies are preferred). See if there are restrictions, such as requiring prior authorization from your provider before covering pricey drugs, or step therapy, which means you have to try less-expensive drugs first, if possible.
Contact Us about Medicare Prescription Drug Plans
Next, look for a new plan during open enrollment in the fall. Roman Brokers Insurance is dedicated to finding the Medicare prescription drug plan that best suits your needs. No one plan is best for everyone. If you are 65 or older seeking a Medicare Part D plan from a reputable company, contact Dan at Roman Brokers Insurance today at 480-834-7447. Dan will help you compare premiums plus out-of-pocket costs for your drugs.
After I’m on Medicare, can I use HSA money for medical expenses without paying taxes on it?
Even though you can no longer contribute to an HSA after you sign up for Medicare, you can use money already in the account tax-free for medical expenses. You can also use the HSA money tax-free for Part B, Part D and Medicare Advantage premiums (but not Medigap premiums).
My Medicare claim was denied. What can I do?
First find out why it was denied. It may be a coding error your doctor can fix and resubmit. Or Medicare may cover an expense but not submit the claim to your Medigap insurer. Drug coverage may be denied if you didn’t follow procedures for step therapy or prior authorization, but that denial may be reversed when you resubmit the forms.
You have 60 days to file an initial appeal for Medicare Advantage or Part D; follow the instructions on the explanation of benefits. If that doesn’t work, you have 120 days to appeal the denial. Look on the back of the Medicare summary notice for details, and see Medicare Claims and Appeals for more about each level of appeal.
You can get help appealing a claim from Arizona’s health insurance assistance program) or by calling 1-800-432-4040.
