You’ve likely worked sun up to sun down for most of your adult life and are looking forward to that sweet relief of retirement. If you decide retiring at age 65 is right for you, take a look at our Medicare Checklist to ensure you’re on the right path to health plan success.
But, if you’re like more than 40% of Americans1, you may be planning to retire at age 66 or older. It’s important to know how this affects your Medicare and retirement health plans. When you elect to work past age 65, you’ll need to carefully plan your options to avoid costly missed deadlines and potential gaps in coverage.
Most people will automatically receive Medicare Part A (hospital insurance) when they turn 65, even if you’re still working and covered by your employer’s healthcare plan.
If you work for a large company (with 20 or more employees) and receive qualifying health insurance through your job, it might make sense to delay signing up for Medicare Parts B and D that have a premium. Talking with your employer’s health plan administrator is an important early step.
If you work for a company with less than 20 employees, you’ll want to sign up for both Medicare Parts A and B when you’re first eligible at age 65.
If your company has a retiree health plan
You’ll want to work with your employer’s health plan administrator to understand how their retiree plan works with Medicare. If you decline employer retiree coverage, you may not be able to change your mind and enroll in this coverage later.
If you will have your company’s retirement health coverage after you retire there are Medicare measures to take and may be required from your company as well. You should enroll in Part A and Part B as soon as you stop working or lose your current employer coverage – even if you sign up for COBRA or retiree health coverage from your employer. You have up to eight months to enroll in Medicare Part B but there can be a lifetime late enrollment penalty if you do not enroll on time. And if you miss this deadline, you will only be able to enroll in Part B during the Medicare General Enrollment Period (Jan. 1 to March 31) with coverage starting July 1.
If your company does not have a retiree health plan
If you will not have health coverage from a current or former employer, you should enroll in both Part A and Part B during your Special Enrollment Period. You have eight months to enroll in Medicare Part B once you stop working or your employer coverage ends – whichever happens first. If you have COBRA coverage through your employer, you’ll still want to sign up before the eight months expires as Medicare does not count COBRA as creditable coverage.
You should also consider whether a Part C Medicare Advantage plan might be the best for you. These plans combine Part A, Part B, Part D and supplemental benefits like vision, hearing, dental and fitness. Your Special Enrollment Period to a buy a Medicare Advantage plan ends two months after your employee-sponsored health coverage ends.
If you prefer to stick with Original Medicare Parts A and B, another option is to add Part D prescription drug coverage stacked with Medicare Supplement to complete your coverage. Part D is available to anyone who is enrolled in Part A or Part B (or both). Your Special Enrollment Period to enroll in Part D ends two months after your employer-sponsored prescription drug coverage ends. If you miss this period, you may have to pay a late enrollment penalty. This lifetime penalty increases for each month you go without Part D or other creditable prescription drug coverage. And, you can only enroll during certain times of the year, which could result in a gap in your coverage.
A Medicare Supplement plan helps bridge the gaps that Original Medicare does not pay such as copays, coinsurance and deductibles. Although not a Medicare product, there are timelines associated with guaranteed acceptance in Medicare Supplement. The open enrollment period for Medicare Supplement will end six months after your Part B effective date. After this time, an insurance company is allowed to deny you or charge you a higher premium based on your health.
Enjoy the Good Life
If you decide to work past age 65, knowing your options and deadlines is key to being on your way to enjoying the Good Life in retirement.
Blue Cross and Blue Shield of Kansas offers Medicare Advantage in select counties across the state. To learn more about all of our Medicare plans and to see availability in your area, visit our website, take advantage of a free seminar or call us at 866.627.6705 to talk about your options. Let us help you live the Good Life!
1 “Snapshot: Average American Predicts Retirement Age of 66.” Newport, F. news.gallup.com. Last accessed Sept. 25, 2019.
Blue Cross and Blue Shield of Kansas is not connected with or endorsed by the U.S. Government or the federal Medicare program.