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Working past 65 and want to know about the Part B Penalty

Many of our clients ask us, what if me or my spouse is still working, will I still get a Medicare Penalty if I do not enroll in Medicare when I turn 65.   This is a really important topic for many Seniors.

Special enrollment period for people covered under an employer group health plan

The Medicare enrollment guidelines tell us…..If you’re 65 or older and covered under a group health plan, either from your own or your spouse’s current employment, you may have a “special enrollment period”in which to sign up for Medicare Part B after you or your husband retires from work and comes off the group employer plan. This means that you may delay enrolling in Medicare Part B when you first turn 65 without having to wait for a general enrollment period and paying the penalty for late enrollment. There are limits, so we strongly advise you to contact Golden Years Design Benefits or consult with  the Centers for Medicare & Medicaid Services (CMS) for more information.

The Part B penalty will not apply if you meet the following criteria:

  • Enroll in Medicare Part B any time while you have a group health plan based on current employment; or
  • Enroll in Medicare Part B during the eight-month period that begins the month after the employment ends or the group health coverage ends, whichever happens first.

When you enroll in Medicare Part B while you’re still in the group health plan, or during the first full month when you are no longer in the plan, your coverage begins either:

  • On the first day of the month you enroll; or By your choice, on the first day of any of the following three months. If you enroll during any of the remaining seven months of the “special enrollment period,” your Medicare Part B coverage begins on the first day of the following month.

If you don’t enroll by the end of the eight-month period, you’ll have to wait until the next general enrollment period, which begins January 1 of the next year. You may also have to pay a late enrollment penalty for as long as you have Part B coverage. YIKES!!!   

 The one exception:

  • You can’t enroll using a special enrollment period if your employment or the employer-provided group health plan coverage ends during your initial enrollment period.

Should I enroll in Part A if I am covered under my group sponsored healthplan?: 

When you turn 65 and are still working we generally reccomend you enroll in Part A during your initial enrollment period. (3 months before your 65th birthday, the month of your birthday, and three after your 65th birthday). Most people do not pay a premium for Part A if you have worked 10 years or 40 quarters. The one exception to this rule is if you are contributing to a Health Savings Account at work, then we reccomend not enrolling as there may be tax implications. 

NOTE: COBRA and retiree health coverage do not count as current employer coverage and we generally recommend enrolling in Part B when you separate from your employers coverage .