The workforce has an increasing share of workers who are 65 and older. In fact, the U.S. Bureau of Labor Statistics is predicting that the segment of workers 65 to 74 years old to increase to 30.2% in 2026 (up from 26.8% in 2016.)
For many, working past 65 is a financial requirement to avoid scraping by and for others it is about fulfillment and not being ready to hang up their boots.
If you are planning to remain in the workforce beyond 65, irrespective of why, you do not want to overlook navigating your enrollment into Medicare before or after retirement.
Your Medicare enrollment choices will depend largely upon your company’s size and what kind of health benefits you have and want to have as you go forward. In this article, we will discuss the areas you don’t want to ignore while you are still working and also point out what steps you need to take with Medicare when you do decide to retire.
Delay or don’t delay Medicare benefits?
As I mentioned, whether you are required to enroll in Medicare at 65 depends on the size of your company. Delaying Medicare is not a “one-size fits all” deal.
If you (or your spouse) work for an employer with 20 or more employees and you are signed up for their group health plan, you can delay Medicare until you retire without penalty. This is because you have what it is called creditable coverage.
Does this sound like your situation? Keep reading as the rest of this article will cover what you need to know when it comes time to retiring and transitioning to Medicare.
In contrast, if you work for a company with less than 20 employees, do not delay Medicare. Even if you have group coverage, you will want to apply for Medicare and enroll in Parts A and B to avoid penalties (be careful if you have an HSA – more on that below.) Medicare will be primary, and your group coverage will be secondary.
Many group coverage plans offer prescription drug coverage. Should you choose to keep your small employer group coverage and it offers drug coverage, you may be eligible to delay Medicare Part D.
Always do a cost comparison to see if it is financially worthwhile to keep or drop your group coverage while on Medicare.
Enrolling in Medicare after working past 65
By delaying Medicare and staying on employer coverage past 65, you will have a different enrollment process when it comes time to retire than those who enroll during their Initial Enrollment Period (IEP).
Since Medicare has multiple parts and they all serve a different purpose, it is not a level playing ground when it comes to how you should enroll in Medicare after 65. Let’s breakdown the different parts and help you decide what you need to do now or later with Medicare enrollment after 65.
Medicare Part A
You likely qualify for premium-free Part A based on your work history. Regardless of the size of your employer, enrolling in Part A is typically recommended since it is no additional cost to you.
In fact, it can help you with costs as Part A will pay secondary to your large group plan if you have a hospital stay.
You can apply for Part A online at ssa.gov. You’ll complete an online form, and within the form, you will have the option to delay Medicare Part B if you have creditable coverage.
Can I contribute to my HSA even with Part A?
No. Contrary to my advice above, if you or your employer are actively contributing to an HSA, you do not want to enroll in Part A. However, if you work for a small employer, you’ll want to enroll in Part A, and instead stop your HSA contributions, because again, Medicare will be primary to your small group plan.
If you have large employer coverage and contribute to a health savings account (HSA), you should delay Part A to avoid IRS penalties. Having any part of Medicare active while also contributing to an HSA is cause for future tax penalties.
When to stop HSA contributions when applying for Medicare after 65
The main thing you need to know is that you cannot contribute to an HSA, in any month that you are receiving Medicare benefits.
There is a bit of a caveat here. If you apply for Part A (and Social Security) and you are six months or more beyond your full retirement age, you will get six months of backdated benefits from Social Security. Since Social Security and Medicare Part A go hand-in-hand, this means your Part A effective date will also retroact six months.
If you were still contributing to an HSA in those months, the IRS could hit you with a penalty. To be safe, end your HSA contributions six months before you plan to retire.
Medicare Part B
If you work past 65 for a large employer with a group health plan, you can delay Medicare Part B until retirement without penalty. As I mentioned earlier, if you work past 65 for a small employer, you’ll need to enroll in Part A and Part B during your IEP.
Small employer coverage is not creditable coverage for Original Medicare, so delaying your enrollment would result in lifelong late penalties.
If you do qualify to delay Part B, you will have a “Special Enrollment Period” (SEP) once you retire. The SEP for Part B is an 8-month window and starts on the day you lose employer coverage or employment, whichever happens first.
How to enroll in Part B after delaying it
While you can enroll in Part A online without issue, you can’t do that for Part B after you’ve delayed it. For Part B, there are forms that you and your employer must complete that will need to be submitted to Medicare. These forms include:
- Form CMS-40B – Paper application for Part B
- You will complete this with the necessary information to apply for Part B
- Form CMS-L564 – Request for Employment Information
- This form is for your employer to complete, attesting to your dates of creditable coverage.
You can either mail or take these forms in-person to your local SS office. In some circumstances, you may be able to call your local office first get a number where you can submit the forms by fax.
What if my employer is unable to fill out the form?
If your employer cannot complete their portion of Form CMS-L564, you can complete Section A, leave Section B blank, and include at least one other acceptable proof of group health coverage. Proof of creditable coverage may include but is not limited to:
- a certificate of creditable coverage from your former group plan carrier
- a copy of your health insurance cards with effective dates
- income tax returns that show health insurance premiums paid
- pay stubs that reflect health insurance premium deductibles
How to appeal Part B IRMAA
Having a higher income up until you retire and/or enroll in Medicare, means you may have an income-related monthly adjustment amount (IRMAA) added to your Part B and Part D premiums. However, you can file to appeal your IRMAA.
Anyone can file an IRMAA appeal though, not all appeals are approved. The appeals that are more likely to be approved are the ones where a life-changing event has happened including:
- death of a spouse
- work stoppage
- work reduction
- loss of income-producing property
- loss of pension income
- employer settlement payment
If your income has decreased below a certain level because of one of the qualifying events, your IRMAA appeal will likely be approved.
Medicare Part D
If you have delayed Medicare Parts A and B, you have also delayed Part D. Enrolling in Part D is voluntary but even if you do not currently take prescription drugs, it is in your best interest to enroll to avoid penalties for signing up late.
Note: If you are planning to enroll in a Medicare Advantage Plan (Part C or MAPD) this does not pertain to you. More information on those plans below.
How to enroll in Part D after delaying it
Enrolling in prescription drug coverage (Part D) after coming off employer coverage is a little different than Part A and B. You get only a 2-month SEP to select a plan instead of 8-months like with A and B.
If you are working with the Boomer Benefits team to sign up for a Medicare Supplement, our team will help you select and enroll in a Part D plan that is right for you.
You can also self-enroll using the Medicare Plan Finder tool where you can choose from hundreds of plans to find the one that is right for you.
Once you complete an enrollment request, your Part D coverage will generally begin on the first day of the following month.
Medicare Part D and retiree coverage
Some employers offer continued coverage to their retirees either in the form of retiree coverage or COBRA. Though these forms of coverage are not creditable coverage when it comes to Parts A and B, they may be for Part D. Check with your benefits manager or HR department to see if you qualify for retaining this coverage and delaying Part D.
Enrolling in Medicare Supplement insurance after 65
Enrolling into a Medicare supplement (Medigap) plan using your one-time Medigap Open Enrollment period will directly coincide with your Part B enrollment. Your Medigap Open Enrollment window is a 6-month period that begins the day your Part B starts.
For example, if your Part B starts October 1st, your Medigap Open Enrollment window starts October 1st and ends March 31st.
During this time, you can work with our team to select the best Medigap plan for you. You will be able to choose a Medigap plan at the best rate regardless of your health. You cannot be turned down for a plan in this enrollment period, so it is important you don’t let it pass you by.
On the contrary, if you enrolled in Part A and B during your IEP and also had employer coverage, you will instead have a guaranteed issue (GI) right when you lose employer coverage.
The GI right allows you to enroll in a Medigap plan without answering any health questions, just like the Medigap Open Enrollment window. However, your GI window is only 63 days long, and does not apply to every Medigap plan.
If you were eligible for Medicare prior to 2020, you can get GI for Plan A, B, C, F, K, and L. If you became eligible for Medicare in 2020 or later, the GI is available to you for Plan A, B, D, G, K, and L.
Enrolling in a Medicare Advantage plan after working past 65
To enroll in a Medicare Advantage plan (MAPD), you must have Part A and Part B. Just as you did with the other parts of Medicare, you will have an SEP in which you can enroll. For MAPD plans, this is a 2-month window of time beginning the month you no longer have employer coverage.
Most Medicare Advantage plans offer prescription drug coverage meaning you will not need to worry about signing up for a Part D plan.
To sum it up
Retiring is supposed to be easy, right? Unfortunately, the transition from the workforce and employer-sponsored benefits to Medicare comes with its own set of rules and complicated enrollment periods. It is not as straightforward as many of us would like it to be.
The good news is, if you plan ahead and understand what action you need to take with your Medicare and retirement plans now, you will get to enjoy (mostly) smooth sailing medical coverage later.
Give yourself plenty of time to get your ducks in a row with Medicare. We recommend beginning your research at least 6 months before retirement.
Our team at Boomer Benefits helps people in your situation every single day. We are on your side with Medicare. We know the ins and outs of what you need to do to enroll and more importantly, how to navigate potential hiccups that can come up with Medicare in the future. Contact our team to get started today!
 During the COVID-19 pandemic, CMS made exceptions to this and provided an online portal for those who delayed Part B to enroll without going to the Social Security office. Check with your local Social Security office for the most up-to-date information on methods for filing this form.