- Your current employment status is not a factor in whether or not you’re eligible for Medicare at age 65.
- If you initially decline Medicare coverage, you may have to pay a penalty if you decide to enroll at a later date.
You can get Medicare if you’re still working and meet the Medicare eligibility requirements.
You become eligible for Medicare once you turn 65 years old if you’re a U.S. citizen or have been a permanent resident for the past 5 years. You can also enroll in Medicare even if you’re covered by an employer medical plan.
Read on to learn more about what to do if you’re eligible for Medicare and are still employed.
Whether you are working or not when you turn age 65, you’ll still be eligible for Medicare coverage. It is not mandatory to sign up for Medicare. In fact, you may prefer the healthcare coverage offered by your employer. However, if you defer or decline Medicare coverage, you could pay some form of penalty.
We’ll go over some of the things you might consider before deciding to enroll in Medicare while still being employed.
Can you qualify for Medicare if you’re under 65 years old?
Most Americans become eligible for Medicare on their 65th birthday.
You may be able to receive Medicare coverage if you’re under age 65 and:
- received disability benefits for 24 months
- have end stage renal disease (ESRD)
Medicare Part A is the hospital coverage portion of Medicare. It includes services such as:
- inpatient hospital care
- inpatient mental health services
- inpatient rehabilitation services
- hospice care
- limited home healthcare
- limited stays in a skilled nursing facility
If you’re eligible for premium-free Medicare Part A, there’s often very little downside to enrolling. You may be eligible for premium-free Part A if you paid into Medicare through payroll taxes for at least 10 years of employment.
If you work for a large company with more than 20 employees, a Medicare policy can act as a secondary payer and can help to fill in gaps in your existing coverage without any additional cost on your end.
If you work for a small company (fewer than 20 employees) or have a health insurance plan through your employer with minimal coverage, enrolling in Medicare may help reduce your medical expenses.
Medicare will often become the primary payer in these cases and may provide better coverage than you currently receive. In fact, your small employer’s insurance may not cover you if they discover you’re eligible for Medicare benefits and haven’t enrolled.
In many cases, it’s best to apply for Medicare Part A when you become eligible, even if you’re covered by a group health plan. Delaying enrollment in Part A may lead to a penalty if you sign up later.
Medicare Part B is the part of Medicare that provides medical insurance. You can use it to cover various outpatient services, such as:
- doctors’ appointments
- durable medical equipment like wheelchairs, walkers, and oxygen equipment
- laboratory testing, such as blood tests and urinalysis
- occupational therapy and physical therapy
- other testing, such as imaging tests and echocardiograms
- outpatient hospital and mental health care
- vaccinations for flu, hepatitis B, and pneumococcal disease
Typically, Medicare offers a 7-month window to apply around your date of eligibility. This is called your initial enrollment period. You can apply 3 months before the month of your 65th birthday, during your birthday month, and for 3 months afterward.
In many cases, you must enroll on time to avoid paying a late enrollment penalty for your Medicare Part B premium. However, if you or your spouse is employed when you become eligible, you may be eligible for an 8-month special enrollment period.
During a special enrollment period, you can keep your existing group health plan for as long as it’s available. If you leave that employer or the employer terminates your coverage, you will typically have this 8-month window to enroll in Medicare without paying any late penalties.
If you’re not eligible for premium-free Part A for any reason, having both Medicare and employer coverage may end up costing you more with little benefit.
Check your current plan against the most recent Medicare Part A premiums to decide if it’s worth making a switch or having both.
Part B often requires an additional premiums and may cause you to lose some or all of your employer coverage.
The standard Part B premium for most people in 2021 starts at $148.50. The higher your income, the higher your rates will be.
If you keep your employer coverage and enroll in Part B, you’ll be paying a premium for coverage you may not need or use.
Talk with your insurance provider and a Medicare agent to understand how enrolling in Part B will impact future enrollment in Medicare and access to an employer-sponsored plan.
If you contribute to a health savings account (HSA), you won’t be allowed to continue contributing under Medicare.
Money from your HSA can be spent more flexibly than insurance or Medicare benefits, so consider this carefully before enrolling.
- You’re not required to immediately enroll in Medicare if you’re eligible but still insured under an employer-sponsored plan.
- Usually, you can continue to receive benefits from your employer and enroll in Medicare when you’re ready to replace that coverage.
- You may want to join at least premium-free Medicare Part A, if you’re eligible when you turn 65 years old. The secondary coverage can help eliminate gaps in your group health plan and may help to save you money.
- If you work for a small company with fewer than 20 employees or have a health plan with your employer that provides minimal coverage, it may make sense to switch to full Medicare coverage — including Part B and prescription drug benefits.
- You’ll want to compare your current premiums and healthcare costs with Medicare premiums based on your income.