You should enroll in Medicare Part A as soon as you become eligible, as in most cases this coverage comes with zero premiums. However, as long as you hold employer coverage, you should qualify for a special enrollment period and be able to delay enrolling in Medicare Part B until your employer coverage ends. At that point, you have eight months to sign up.
At Malhotra & Assoc. Insurance, we are here to help you understand all the insurance options available to you and what it may mean if you choose to delay your coverage. All you have to do is give our friendly, licensed agents a call so we can discuss your options!
What is Primary and Secondary Insurance?
When you have more than one insurance policy at once, one plan becomes the primary insurer and the other becomes the secondary. Primary insurance companies pay their share for the covered service before sending the bill to the secondary insurance company. With Medicare and employer coverage, the plan that pays first is determined by whether or not you have group health insurance.
When Can You Sign Up for Medicare?
If you are turning 65 years old and still working but not yet receiving benefits from Social Security at least four months before your birthday, you should sign up for Medicare. With your employer coverage, however, you may be able to delay signing up for Part B without a penalty.
If you are 65 or older or younger than 65 with a disability, you may not have to sign up until you or your spouse retire and you lose employer coverage. Whether or not you pay a penalty for late enrollment depends on how large your company was.
What If You Currently Have Employer Coverage?
If you are currently working and have employer health insurance through your job, your coverage with Medicare will depend on how many employees your company has. If your company has fewer than 20 employees, you should sign up for Medicare Part A and Part B as soon as you become eligible. Medicare will be your primary insurance, paying before your employer insurance does for any covered service. If your employer has more than 20 employees and your benefits manager confirms that you have group health coverage, you should sign up for Part A as soon as you are able but may be able to delay enrolling in Part B without facing the lifetime late enrollment penalty.
Many people are able to receive Medicare Part A without having to pay premiums. In this case, while they hold employer coverage, they can sign up as late as they wish to. Coverage will be retroactive for up to six months, but no earlier than the first month you became eligible for Medicare coverage.
What is the Part B Late Enrollment Penalty?
It is best practice to sign up for Medicare Part B as soon as you become eligible for Medicare coverage to avoid paying the late enrollment penalty. This penalty charge adds 10% of the standard monthly premium to your premium for every 12 month period you went without signing up after you become eligible. The penalty lasts for as long as you hold coverage, which is why it is called a lifetime late enrollment penalty.
You may be able to avoid the Part B late enrollment penalty if you qualify for a special enrollment period. There are a number of circumstances that make you eligible for a special enrollment period, including if you hold employer coverage.
What Happens When Your Employer Coverage Ends?
When your employer coverage ends or you retire and lose benefits, whichever occurs first, you have eight months to sign up for Medicare Part B without a late enrollment penalty. This is your special enrollment period. You can sign up for Part B by using the Application for Enrollment in Part B and a Request for Employment Information.
What is COBRA Coverage?
If you are already enrolled in COBRA coverage when you sign up for Medicare, it may end. If you are eligible for COBRA after you’ve signed up for Medicare, you can sign up for COBRA, which will serve as the secondary coverage.
To learn more about how Medicare works with other coverage, speak with an agent of Malhotra and Assoc. Insurance.