Turning 65 is a significant milestone in life, and with it comes the question: “Do I need to sign up for Medicare?” The answer isn’t always as clear-cut as many might think. If you’re still working and covered by a group health insurance plan, there are a few important things you need to know to ensure a smooth transition when it’s time to enroll.
Do You Really Need to Enroll in Medicare Right Away?
The first piece of advice is simple: You don’t have to enroll in Medicare Part B as soon as you turn 65. While it might seem like everyone is telling you to get on Medicare, there are specific conditions that might make it unnecessary, especially if you’re still employed and covered by an employer’s health insurance plan.
If you’re working for a company with more than 20 employees and you’re covered under the employer’s health plan (or your spouse’s plan), you do not need to sign up for Medicare Part B right away. In fact, enrolling in Part B too soon might not be the best decision. The good news is, if you delay enrolling in Part B, you won’t face any penalties as long as you do so later, when you’re ready to retire or lose your employer health coverage.
What Should You Do Instead?
Although Medicare Part B enrollment may not be required, you do need to sign up for Medicare Part A. Part A is free for most people, and enrolling in it offers some extra coverage for hospitalization. Signing up for Part A also ensures that you’re assigned your official Medicare number, which will be needed when you eventually retire.
Preparing for the Transition to Medicare
As you approach retirement (or the time when you’ll lose your employer coverage), it’s time to start preparing for Medicare Part B enrollment. About three months before you lose your group insurance coverage, begin the process of getting everything ready.
Here’s what you’ll need to get started:
- Form 40B: This is the application form for Medicare, which you’ll submit to the Social Security office.
- CMS L564 Form: This form needs to be filled out by your employer (or your spouse’s employer). It confirms that you’ve had continuous group health insurance coverage since turning 65. If you’ve switched employers during this time, you’ll need this form filled out by each employer.
It’s crucial that you didn’t experience any gaps in coverage between jobs or when switching plans. If there was any gap, even for a short time, it might result in penalties or issues when applying for Medicare.
Special Enrollment Periods
If you’ve stayed on your employer’s health insurance and are now ready to enroll in Medicare as you retire, you will be eligible for a Special Enrollment Period. This period allows you to enroll in Medicare Part B anytime within 63 days of losing your group insurance coverage. The great thing about this period is that it avoids any late enrollment penalties, as long as you act within this timeframe.
Medicare coverage will generally start the first of the month after you enroll, ensuring that there’s no break in your health coverage. It’s important to start this process as soon as you know your retirement date or when you lose your employer health plan.
What Happens If You Miss the Deadline?
If you miss your Special Enrollment Period or fail to enroll in Medicare when required, you could face penalties. For instance, if you don’t enroll in Medicare Part B and you’re not covered under a group health insurance plan, you could incur a late enrollment penalty. This penalty is 10% of the monthly premium for each year that you could have been enrolled in Part B but weren’t.
Open Enrollment
If you forget to enroll in Medicare Part B during your Special Enrollment Period, don’t worry – there’s still an Open Enrollment Period from January to March each year. During these months, you can apply for Medicare Part B. However, keep in mind that if you miss the Special Enrollment Period and enroll during Open Enrollment, you will likely face the penalty mentioned earlier.
Final Thoughts
In summary, if you’re working and covered by group health insurance from an employer with more than 20 employees, you don’t need to sign up for Medicare Part B when you turn 65. Just remember to enroll in Part A and begin preparing for the transition when you’re ready to retire or lose that coverage. Stay ahead of the paperwork, and make sure you don’t miss any deadlines to avoid penalties.
