Medicare Eligible, But Still Working: What Happens Now?
In today’s economy, most seniors are doing whatever it takes to make ends meet on fixed or reduced incomes. This includes re-entering the workforce or continuing to work well past the age of 65. This begs the question: I’m Medicare eligible, but still working: What happens now?
Many may believe that you can’t enroll in a Medicare plan if you’re still working at or past the age of 65. This is largely because of the options you’re given when you’re a senior working with a large company that offers health insurance. It may seem like you must choose one over the other – Medicare or company health insurance – but this is not the case.
Employment Status Does Not Change Your Eligibility
In most cases, working seniors tend to enroll in the health insurance coverage that’s offered by their employer. Many of them are likely enrolled in family plans that cover their spouse as well. Does this mean that, if you’re one of these working seniors, you are ineligible to enroll in a Medicare plan if you so choose?
Your eligibility for Medicare upon turning 65 will never change. Even if you’re still working, you can enroll in a Medicare plan. Some seniors tend to hold both employer coverage and Medicare for extra savings, but we’ll talk more about that momentarily.
Just as you can still enroll in a Medicare plan as a working senior, you can also put off enrollment until you end your employment or stop your coverage. If you choose to do this, you’ll be entitled to an eight-month Special Enrollment Period (SEP) during which you can enroll in a Medicare plan without worrying about a late-enrollment penalty. If you enroll outside of your eight-month SEP, that late-enrollment penalty will likely apply.
There Are Three Options Available to You
Per federal law, if you work for a large employer, they have to offer you and your spouse the same benefits that they offer younger employees and their families. It’s up to you whether you want to use their coverage completely or enroll in Medicare.
Essentially, you’ll have to make one of the three choices below:
- Keep your employer’s health plan and put off enrolling in Medicare
- Drop your employer’s coverage and enroll in Medicare completely
- Keep your employer’s health coverage and enroll in Medicare, retaining both plans
There are benefits and drawbacks to each option. For example, your employer’s health insurance may cover certain things that Original Medicare, Medicare Part A and Medicare Part B, does not. Many employers offer dental, vision, and hearing coverage with their health plans. If you opt to go completely with Original Medicare, you’ll end up paying for dental, vision, and hearing care out-of-pocket.
If you choose to wait to enroll in Medicare until after you’ve left your job, you have your eight-month SEP to do so, but eight months can pass quickly. It’s important to remember to enroll as soon as you can within those eight months so that you won’t have to pay a late-enrollment penalty.
The Rules of Enrollment and Coverage Vary Depending on Your Situation
Some of you may be wondering how Medicare and private health insurance plans work together. It all depends on a few different factors:
- The size of the company you work for
- Whether your health insurance coverage actually comes from your employer
- Whether or not you’re self-employed
- Whether or not you have a different type of employer insurance
- You’re enrolled in COBRA
- You’re working, but don’t have health insurance
In most cases, if you hold both employer insurance and Medicare, your Medicare coverage is secondary. This means that it picks up much of the cost that your employer insurance would not. If you have COBRA and Medicare together, Medicare will pay first unless you’re an ESRD patient.
It’s always best to speak with your company health insurance provider to get your answers. They’ll be able to answer any questions you have about your health insurance plan and how it’ll interact with Medicare.
Larry Johnson is a content writer with several years of experience in creating informative content for a variety of industries on topics that matter. He is a 2009 graduate of the University of North Carolina School of the Arts.
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