• If you’re eligible for premium-free Part A but opt out, you’ll be responsible for additional fees and can lose Social Security benefits.
  • You may be able to delay enrollment in Part B if you have another source of health insurance coverage.

If you’re eligible or about to become eligible for Medicare coverage, you may be wondering if you need to enroll. If you already have other health insurance coverage, such as through your or a spouse’s current employer, your former employer, or COBRA, you may not need to sign up right away.

But before deciding against enrolling, it’s a good idea to talk to a Medicare agent. They can walk you through requirements, fees, and other considerations, such as whether you’re eligible to defer enrollment without paying a penalty.

Medicare Part A is one half of original Medicare. If you’ve paid Medicare taxes for at least 10 years (or 40 quarters_, Part A may be available premium-free.

If you’re eligible for premium-free Part A, you can’t opt out unless you give up your benefits from Social Security (or the Railroad Retirement Board) and pay back any previous benefits you have already received.

If you’re not eligible for the premium-free plan, you may be able to delay enrollment if you have other health insurance coverage or are covered through COBRA.

Medicare Part B is the other half of original Medicare. It typically does have a monthly premium. In 2021, this premium is $148.50 for most people, although it may be higher depending on your income.

As with paid-premium Part A, you may be able to delay enrollment in Medicare Part B if you have other coverage and want to avoid paying an added premium.

To avoid a late enrollment penalty, sign up for Medicare as soon as you (or your spouse) are no longer employed, or when your group health plan ends.

If you’re a U.S. citizen or have been a U.S. resident for the past 10 years, then you’ll be eligible for Medicare starting at age 65. You may be eligible at a younger age if you have certain disabilities or permanent kidney failure.

If you’re already receiving Social Security benefits when you become eligible, then it’s likely that you’ll be automatically enrolled in Medicare. If not, you’ll need to sign up.

Your initial enrollment period begins 3 months before the month of your 65th birthday and ends 3 months after.

If you choose not to enroll in Part B during your initial enrollment period, there’s a general enrollment period from January 1 to March 31 every year, as well as the open enrollment period from October 15 through December 7.

If you’re 3 months away from turning age 65 (or older) and not yet ready to start receiving your monthly benefits from Social Security, you can sign up for just Medicare through the Social Security website and wait to apply for retirement benefits.

Signing up on time

Signing up for Medicare on time is critical. If you don’t, you risk delaying your coverage and may be responsible for an additional 10 percent charge on your Part B premiums once you do sign up.

This accumulates for each 12-month period you’re eligible but don’t sign up, unless you qualify for a special enrollment period. This is an 8-month period following certain life events.

If you’re still working when you become eligible for Medicare at age 65, you have some flexibility in signing up.

If your employer has 20 or more employees and you have coverage through a group health plan, you don’t need to enroll in Medicare right away.

That said, it’s usually worthwhile to enroll in Part A on time, even if you already have coverage. The benefit of this is that it usually doesn’t cost anything, and it allows your Medicare plan to function as a secondary insurance. This means it could help cover costs for anything your employer’s health plan doesn’t cover.

It’s important to note that people who sign up for Medicare are not allowed to contribute to a health savings account (HSA) at the same time. This applies even if you continue with an employer’s HSA-qualified high-deductible health plan.

If your employer has less than 20 employees, enrolling in parts A and B on time can help you avoid penalties. These will be your primary insurance, and if you don’t enroll, your employer may pay less (or nothing) for your care.

While you don’t necessarily have to get Medicare, it can be difficult to opt out and you should consider all your options, such as what other plan you would use and if you would make a switch later on.

And while there used to be fees for not having health insurance coverage, as of 2019 that no longer applies.

Generally speaking, signing up for Medicare on time can help you avoid costly penalties throughout your retirement.

There may be additional rules and restrictions if you’re eligible for Medicare and thinking about staying on another group health plan, so make sure to check your plan and know how it works with (and without) Medicare.

This article was updated on November 20, 2020, to reflect 2021 Medicare information.


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