Medicare Enrollment When You Have Employer Coverage
Medicare is our country's health insurance program for people age 65 or older. The program helps with the cost of health care, but it doesn't cover all medical expenses or the cost of most long-term care. You're eligible for Medicare at age 65, even if you're still working.
Some employers end their coverage on your retirement date, while others end coverage at the end of the month prior. If you're currently covered by your employer's medical insurance, ask when your coverage ends. Clarifying when your coverage ends helps you know when to put your new Medicare plans into effect.
Enrolling in a Medicare Plan Through Via Benefits
Medicare Part B is required for all our Medicare medical coverage options. We recommend contacting the Social Security Administration (SSA) at 1-800-772-1213 (TTY 1-800-325-0778) to obtain Part B if you haven't already. Social Security notifies you once your request to enroll in Medicare Part B is processed, and a new Medicare card is issued. The new Medicare card information is needed for the enrollment process.
Helpful Term
Late Enrollment Penalty (LEP): If you don't get Part B when you're first eligible, your monthly premium may go up 10% for each 12-month period you could've had Part B, but didn't sign up. In most cases, you'll have to pay this penalty each time you pay your premiums, for as long as you have Part B. And, the penalty increases the longer you go without Part B coverage.
Benefits of Switching from Group Coverage to Individual Coverage
Planning for retirement is tough enough – and it gets even tougher when the retirement benefits you expect to receive from an employer change. A growing number of U.S. employers who want to avoid cutting benefits or raising premiums, due to rising health care costs, have chosen to transition Medicare-eligible retirees from group coverage to individual coverage.
If you had a group health plan through your employer, your employer most likely:
Offered you a choice in health plans
Paid for all or some of your monthly premium
Deducted your premium from your paycheck
Provided your plan documents
Answered your questions about your plan
Individual Medicare
Transitioning from a group health plan to individual Medicare coverage benefits you in many ways. First, unlike plans available when you're under 65, Medicare plans only cover one person—you! With Via Benefits Insurance Services, you can now choose from a wider range of plan types and insurance carriers. This gives you the opportunity to select a plan tailored to your needs and budget.
With individual Medicare coverage, you:
Shop for and choose a plan tailored for you
Purchase your plan
Pay all monthly premiums
Get to know and manage all of your health coverage and benefits
If you're unfamiliar with Medicare, it may be helpful to understand a bit more about how Medicare differs from the coverage you currently have. Key differences include coverage choices and tax credit and health savings account (HSA) information.
Coverage Choices
Original Medicare Parts A and B only covers about 80% of your total health care cost. To get the right level of coverage, you need to supplement Original Medicare with additional medical and/or prescription drug coverage. Your coverage choices differ because Medicare includes a number of separate “Parts” and plans that cover different health care services. Additionally, Medicare plans only cover individuals, so family members can’t be included in your coverage.
Tax Credit and Health Savings Account (HSA) Information
If you receive a federal tax credit for your current coverage, you're no longer able to receive it when you become eligible for Medicare. If you've been putting money into an HSA, you must stop those payments before Medicare or Social Security benefits begin. HSAs are tax-exempt accounts to which people contribute pretax dollars through their employers. The money can be used to pay for medical expenses, such as health plan deductibles. IRS rules prohibit Medicare recipients from contributing to HSAs. If you continue to do so while on Medicare, you could face stiff tax penalties.
When Medicare Starts and Your Employer Medical Insurance Ends
If you’re already receiving Railroad Retirement Board (RRB) benefits or Social Security retirement or disability benefits, you automatically receive your Medicare card three months before you turn 65. However, if you’re not receiving RRB benefits or Social Security benefits, you need to contact the SSA to enroll in Medicare. Even if you don't plan to start receiving your retirement benefits immediately, apply for Medicare three months prior to the month you turn 65.
Tip: Enrolling in Medicare online is brief and documentation is often unnecessary. Your Medicare benefits begin the year you turn 65, on the first day of your birthday month. However, if your birth date is the first of the month, your benefits begin on the first day of the month prior to your birthday month instead.
Most people start their Medicare Part A and Part B benefits at the same time. Medicare Part A benefits are paid for during your employment, through deductions on your pay stub (Medicare Tax, FICA-Med or MWT). Because you must pay for Part B, you may turn it down. However, it’s possible to encounter penalties or have limited future enrollment dates if you delay enrolling in Part B. Part B has a monthly premium which is usually deducted from Social Security benefit checks. If you're not currently receiving retirement benefits, you're billed by Medicare for your Part B premium instead.
Employer Coverage and Enrolling in Medicare
Even if you have optional coverage through your employed spouse or a former employer, you still may need to make some important Medicare enrollment decisions. Most people should enroll in Medicare Part A when they're first eligible, but certain people may choose to delay Medicare Part B. In most cases, it depends on the type of health coverage you may have. Visit medicare.gov to learn more about getting Medicare Parts A and B.
Consider the following:
Type of coverage offered through your spouse or a former employer
Does it require you to have Medicare Parts A and B?
Does it pay its portion of your medical bills prior to Medicare doing so?
Are dental and vision benefits incorporated into the plan?
Is a Health Savings Account (HSA) an option?
Are additional life or long-term care benefits available?
Cost of employer coverage
Many premiums for group health plans are higher than paying for both Medicare Part B and other Medicare plans.
Whether you want to delay enrollment in Medicare Part B
Part B has an additional monthly premium. So delaying your enrollment could save you money if the health coverage offered through your spouse (or a former employer) doesn’t require enrollment in Part B.
If your spouse is currently working, you can enroll in Part B without any penalty when his or her employment ends.
If your spouse isn’t currently employed, you’re limited to only one enrollment period each year. This could be a problem if employer coverage unexpectedly ends, requiring you to fall back to Medicare.
Any time without employer coverage or Part B requires you to pay a late enrollment penalty (LEP) when you gain coverage. You pay this penalty for as long as you have Part B.
We recommend you contact your spouse’s employer (or your former employer) and request information as to whether your coverage changes once you enroll in Medicare.
Actively Employed and Enrolling in Medicare
If you're 65 or older and covered under a group health plan, either from your own or your spouse's current employment, you have a Special Enrollment Period (SEP) in which to sign up for Medicare Part B. This means you may delay enrolling in Medicare Part B without waiting for the General Enrollment Period (January 1 through March 31 of each year) and paying the LEP.
The rules allow you to enroll in Medicare Part B:
Any time while you have a group health plan based on current employment
During the eight-month period that begins the month after the employment ends or the group health plan ends, whichever happens first
Contact SSA when you’re ready to enroll and they will inform you of your Part B start date. Be aware, if you don't enroll by the end of the eight-month period, you must wait until the GEP, which begins on January 1 of the next year. You may also have to pay the LEP for as long as you don’t have Part B coverage. Learn more about special enrollment periods. Visit ssa.gov to apply for Medicare online.
