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Do I Need to Sign-Up for Medicare If Iím Still Working?

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A road sign with the text, 'Medicare Just Ahead' printed on it.

The rules for enrolling in Medicare can be very confusing with all the different choices available today, but if you postpone retirement past age 65, as many people are doing, it becomes even more complicated.

Do I need Medicare if Iím retired and working? is one of the most common questions facing Medicare counselors today. The answer: It depends on your employer.

First, letís review the basics. Remember that original Medicare has two parts: Part A, which provides hospital coverage and is free for most people. And Part B, which covers doctorís bills, lab tests and outpatient care. Part B also has a monthly premium, which is $148.50 for most beneficiaries in 2021, but is higher for individuals earning above $88,000.

If youíre already receiving Social Security, youíll automatically be enrolled in parts A and B when you turn 65, and youíll receive your Medicare card in the mail. It will include instructions to return it if you have work coverage that qualifies you for late enrollment. If you arenít yet receiving Social Security, you will have to apply, which you can do online at SSA.gov/medicare.

If you plan to continue working past the age of 65 and have health insurance from your job, your first step is to ask your benefits manager or human resources department how your employer insurance works with Medicare. In most cases, you should at least take Medicare Part A because itís free. (Note: If youíre funding a health savings account you may not want to take Part A because you canít make contributions after you enroll). But to decide whether to take Part B or not will depend on the size of your employer.

Small Employer
If your current employer has fewer than 20 employees, Medicare will be your primary insurer and you should enroll in Medicare Part B during your initial enrollment period. This is a seven-month period that includes the three months before, the month of, and the three months after your 65th birthday.

If you miss the seven-month sign-up window, youíll have to wait until the next general enrollment period, which runs from Jan. 1 to March 31 with benefits beginning the following July 1. Youíll also incur a 10 percent penalty for each year you wait beyond your initial enrollment period, which will be tacked on to your monthly Part B premium.

Large Employer
If your employer has 20 or more employees, your employerís group health plan will be your primary insurer as long as you remain an active employee. If this is the case, you donít need to enroll in Part B when you turn 65 if youíre satisfied with the coverage you are getting through your job. But if you do decide to enroll in Medicare, it will supplement your employer insurance by paying secondary on all of your claims.

Once your employment or group health coverage ends, you will then have eight months to sign up for Part B without a penalty. This is known as the Special Enrollment Period.

Check Drug Coverage
You also need to verify your prescription drug coverage. Call your benefits manager or insurance company to find out if your employerís prescription drug coverage is considered ďcreditable.Ē If it is, you donít need to enroll in a Medicare Part D prescription drug plan. If it isnít, you should purchase a plan (see Medicare.gov/plan-compare) during your initial enrollment period or youíll incur a premium penalty (1 percent of the average national premium for every month you donít have coverage) if you enroll later.

If you have more questions or need help, contact the Oklahoma Senior Health Insurance Counseling Program, which offers free Medicare counseling. To find a local counselor call 800-763-2828.

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