Should I Enroll in Medicare If I'm Still Working?

Many people keep working well beyond age 65 -- the age when most people become eligible for Medicare. If your employer offers health coverage, do you need to enroll in Medicare? What about Medicare’s prescription drug benefit?

Most workers probably should enroll in Medicare Part A, which is free for most people and covers institutional care in hospitals and skilled nursing facilities, as well as certain care given by home health agencies and care provided in hospices.  But ask your employer (or your spouse’s employer, if that’s where you get your coverage) whether your current coverage will change in any way if you enroll in Medicare, even just Part A. For more information on Part A, click here.

Medicare Part B, which covers outpatient and preventative care like doctor visits and tests, has a monthly premium that changes each year (it is $130 a month in 2018).  Individuals who don't sign up for Part B when they first become eligible can pay a 10 percent premium penalty for each year that enrollment is delayed. However, there is an exception.

Whether you should enroll in Part B while you are still working depends on how many people work for your employer. If your employer has 20 or more employees, you do not need to sign up for Part B right away because your employer's group health plan will be the primary insurer. When you retire, you will have a special enrollment period of eight months to sign up for Part B, without penalty.

If your employer has fewer than 20 employees, however, you should enroll in Medicare Part B when you are first eligible. Medicare is the primary insurer, which means it pays before your employer's insurance pays. If you don't enroll, your employer's plan can refuse to cover you for services that Medicare would have covered. That means that you may have to pay for those services out of your own pocket. Before making a decision about Medicare Part B, you should always contact Social Security by dialing 800-772-1213 or visiting your local Social Security office. The Medicare Rights Center has a handy list of Questions to Ask Social Security During Medicare Enrollment. For more information on Medicare Part B, click here.

Medicare Part D covers prescription drugs. Even if you choose not to enroll in Medicare Part B, you can still enroll in Part D, and doing so may be advisable to avoid a late-enrollment penalty similar to the one for Part B. If you already have prescription drug coverage through your employer, your insurance plan should send you a letter telling you whether or not the company's coverage is "creditable" -- meaning it is equal to or better than what Medicare is offering. If it is "creditable," then you won't have to pay a late-enrollment penalty if you decide to switch to Medicare Part D later.

Also, if you are already covered by your company's drug plan, a Medicare plan may not be right for you. Don't sign up until you compare your current plan with the Medicare plans available in your area.  Finally, before you sign up for a drug plan, ask your employer if you can drop your drug coverage without losing your other supplemental insurance. Once that insurance is gone, you may not be able to get it back.

If you are currently receiving Social Security benefits, you don't need to do anything to enroll in Medicare. You will be automatically enrolled in Medicare Parts A and B effective the month you turn 65. If you do not receive Social Security benefits, then you will need to sign up for Medicare by calling the Social Security Administration at 800-772-1213 or online at www.socialsecurity.gov/medicareonly. If you decide not to enroll in Part B, fill in the box on the back of your Medicare card declining Part B coverage and mail it back to the address listed. You will be mailed a new card.

For more from Medicare on when and how to sign up, click here.