Some may choose not to enroll in Medicare due to being on an employer group health plan. Medicare will not penalize you for this under certain circumstances, but it’s always important to know what those circumstances are.

Getting Medicare while working

Having both Medicare and employer group health insurance is a way to double your coverage at a small cost. However, the number of employees your employer has determines whether you can delay your Medicare enrollment. If your employer or your spouse’s employer has under 20 employees, you will need to get Medicare when first eligible. Late enrollment penalties apply when you get Medicare after your Initial Enrollment Period passes. That’s why it’s a good idea to sign up.

There is a major coverage benefit here because your two health insurance policies will be able to give you an even greater amount of savings. The two will be designated as primary and secondary payers. The primary payer pays what it can up to the plan’s limits, and then what was not taken care of will be left up to the secondary payer. It should be noted that the secondary payer may not cover the entire remaining portion or any of the leftover costs at all. 

Primary and secondary status is determined by the number of employees your employer has. If your employer has fewer than 20 employees, then Medicare will pay first. If your employer has 20 or more employees, your group health plan will pay first.

Enrollment penalties

If the employer group health insurance coverage comes from an employer who has fewer than 20 employees, late fees will apply if you do not sign up for Medicare.

Late fees have a lasting effect on the premiums you’ll pay from your enrollment date onward. 

If you are subjected to late enrollment penalties, you need to be aware of the penalties that come with each part of Medicare. For Part A, your premium may increase by 10% if you do not enroll when you first become eligible. This 10% increase will last for twice the amount of time you went without Part A but were eligible to enroll. For example, if you were eligible for Part A for five years but never enrolled, then your penalty will last for ten years.

For Medicare Part B, your premium may go up 10% for each full year you went without its coverage but were eligible. And, unlike Part A, the penalty for Part B can be permanent, meaning you will have to pay this penalty for as long as you have Medicare Part B. This is why it is crucial you do not delay your enrollment unless absolutely necessary as this penalty will only continue to increase the longer you put off your enrollment.

After your Initial Enrollment Period is over, you will have another 63-day period where you can enroll in Medicare Part D. If you do not enroll in Part D or enroll in other creditable drug coverage, then you will have to pay a late enrollment penalty once you do enroll in Part D. Like Part B, this penalty is added onto your premium and will last for as long as you have Part D coverage. The penalty for enrolling late in Part D ultimately depends on the amount of time you went without Part D or other prescription drug coverage.

However, if you are eligible for a Special Enrollment Period, you can bypass all these penalties and enroll in Medicare.

When you can delay

You may choose to forgo Medicare enrollment because you are satisfied with the coverage you currently have. If that is the case, and your employer (or spouse’s employer) has at least 20 employees, then you can delay Medicare enrollment until you no longer have your group health policy.

Once you no longer have your group health coverage in this case, you have eight months to sign up for Medicare Part B without penalty. This will qualify you for a Special Enrollment Period.

There are several circumstances that will qualify you for a Special Enrollment Period, such as:

• Moving to another location that is not in your plan’s service area
• Losing your current coverage, such as with your job
• Having the opportunity to get better coverage
• Your plan changing the contract it has with Medicare

Regardless if you are satisfied with your group health plan coverage, it is highly recommended to enroll in at least Medicare Part A as soon as you become eligible. As mentioned previously, having both Medicare and employer group health insurance is a great way to double your coverage. Not only that but since Part A is typically free for most beneficiaries, you won’t have to pay a single premium payment regarding Part A if you qualify. You can even be automatically enrolled if you get Social Security benefits.

Should you get Medicare if you’re still working?

While the answer to this question is ultimately up to you, we highly advise that you take a look at all your options before making a sudden decision. If you are able to delay your Medicare enrollment without facing late enrollment penalties and keep your current coverage, that may be something to consider. However, having both Medicare (at least Part A) and your employer group health plan will increase the coverage you receive. And, once your group health plan ends, you won’t have to worry about enrolling in other coverage because you will have Part A already in place.

Overall, just make sure you are considering all your options and keeping your health and budget in mind when you do. This will make the decision-making process much simpler, but we are always available to assist you when you need it.

If you’re interested in joining a Medicare policy while working or have other questions relating to Medicare and group health insurance, then you can call us today. Medicare Peace of Mind aims to give you what’s in the name – peace of mind. 

Call us today at 970-233-0063.