Loren Wade holds an interesting American record. He was America’s oldest employee, ever, when he celebrated his 103rd birthday while still working in his 33rd year greeting people at a Wal-Mart in Kansas. This may not be how you and I want to celebrate turning 103, but many people do choose to work past age 65.
As discussed further in the video on penalties, and the video on enrolling in Medicare, as long as you actively work for a company with over 20 employees, if you decide to stay on Group healthcare coverage instead of applying for Medicare it should not result in any penalties. You can apply for your Part A when you are turning 65 which is without any cost for most people, or you can delay Part A, too. As for Part B, you will want to delay Part B if you are keeping your Group health coverage and there is more than 20 employees in your Group, as having Part B will duplicate what you already have with your Group health coverage and you’ll be paying for Part B with no meaningful added benefits.
Note, though, that you must keep actively working. Retirement plans, or COBRA, do not provide a basis for a Medicare deferral after you turn 65.
When you reach 65 and continue to work you will generally have a choice between staying with your Group healthcare coverage or surrendering it to go onto Medicare. You will want to compare the cost and benefits differences both ways. For many people Medicare is the better deal, after all you have been paying into Medicare for 40 years so it should be a great deal. Of course, every group plan is different and some are more generous than others. The other issue you will want to weigh is if you are paying into an HSA. If so, delaying Medicare will allow you to continue contributing to your HSA further. You must, however, stop making HSA contributions 6 months before you do enroll into either Part A or Part B of Medicare in order to avoid tax penalties. You will want to calculate your retirement accordingly.
Those who have a spouse who is not yet 65 themselves, and is on their Group Health plan tend to stay put with group health coverage so that their spouse can retain coverage.
When you are getting ready to retire is when you will want to enroll into Medicare Part B giving yourself 2 to 3 months for approval of your application. I recommend doing so through an appointment with your local Social Security office where an agent there can take your paperwork, sometimes shorten the approval process, and work with you on a timeline for beginning Medicare. Appointments can take 2-4 weeks to get. You can apply for Part B online instead, but there will be less control of timelines that way.
You will need some very important paperwork in order to apply for your Medicare Part B if you are past age 65 which is referred to as a delayed enrollment. These Medicare forms are referred to as Evidence of Credible Coverage. They show Medicare that you have had healthcare coverage through work from when you turned 65. The bottom line is that you get these forms from your HR Department who will know exactly the paperwork that you need.
Once you get your Part B approved by Medicare, you will have essentially the same options as someone has when they’re turning 65. You will be able to sign up for a Medigap supplement with no underwriting and have a Special Enrollment Period to sign up for a Part D drug plan as well. If you prefer a Medicare Advantage plan you will have that option as well.
While you wait for your Part B to be approved, we are happy to go over all of your plan options with you.
