Health insurance decisions become more complicated as baby-boomers approach retirement age. Many people want to know when to apply for Medicare, and how it works with their employer or retiree health insurance plans. Here are some rules to keep in mind for persons without disabilities; rules for disabled persons are different.
You will be eligible for Medicare when you reach age 65. This may be different than when you begin receiving Social Security retirement (which could be as soon as age 62 for early retirement or as late as age 70). About 3 months before you turn age 65, you should receive a letter from Medicare requesting that you start the process of deciding when to sign up for Medicare. If you do not receive this letter, you should contact Medicare yourself about this time. If you would like, you can sign up for Medicare as early as 3 months before you reach age 65.
The initial enrollment period for Medicare begins 3 months before you reach age 65, and ends 3 months after you reach age 65. Here’s a trap for the unwary. If you do not enroll in Medicare during that time period (unless you have a qualified reason to delay your enrollment, like coverage under a current employer’s plan), when you enroll later you will face a penalty in the form of higher premiums and a delay in starting coverage.
What if you have coverage at age 65 through your current employer’s (or your spouse’s current employer’s) group health insurance plan? First, this means you can delay signing up for Medicare until that group coverage ends, if you wish. If your group policy offers good coverage, you may not want to pay Medicare premiums also. If your employer has 20 or more employees (or is in a multi-employer plan), the company must offer current employees 65 and older the same health benefits under the same conditions as it offers to younger workers. If you have coverage under one of these larger employer plans and Medicare, the group plan will pay first, with Medicare paying second. If your employer has less than 20 employees, your group plan may or may not offer coverage to employees who are eligible for Medicare. If you have coverage through a smaller employer’s policy and Medicare, then Medicare pays first and the group policy second.
Do you have retiree health insurance from a job you or your spouse has retired from? Once you are eligible for Medicare, many retiree policies reduce their benefits so that they only supplement what Medicare pays. If your retiree policy does this, you will need to sign up for Medicare when you are eligible for it.
There is much more to discuss about various Medicare topics, which will appear in later articles. More information is available from 1-800-MEDICARE or online at www.medicare.gov, or through your employer’s human resources office.
Kim K. Steffan is an attorney with Steffan & Associates, P.C. in Hillsborough, NC. She can be reached at 919-732-7300 or firstname.lastname@example.org.
This article was last updated in January 2020.