Medicare and Employer Coverage

Can You Keep Employer Coverage After 65?

Yes, many people keep employer health coverage after turning 65. But that does not automatically mean you can ignore Medicare.

The right Medicare decision depends on the size of the employer, whether the coverage is based on current employment, whether you are the employee or spouse and how the plan coordinates with Medicare.

The Big Question: Is the Employer Large or Small?

This is one of the most important Medicare questions for people working past 65.

Do not guess here. Ask the employer benefits department or plan administrator how the group plan coordinates with Medicare.

Can You Delay Medicare Part B?

You may be able to delay Medicare Part B if you or your spouse are actively working and covered by a qualifying employer group health plan.

The key phrase is current employment. Coverage based on active work is different from COBRA, retiree insurance or individual coverage.

Should You Enroll in Medicare Part A?

Many people enroll in Medicare Part A at 65 because it is usually premium-free if they or their spouse paid Medicare taxes long enough.

But there is one big warning. If you are contributing to a Health Savings Account, enrolling in any part of Medicare generally means you can no longer contribute to the HSA.

HSA Warning

If you want to keep contributing to an HSA after 65, do not automatically enroll in Medicare Part A. Talk with your benefits advisor, tax professional or Medicare advisor before making changes.

Employer Coverage vs Medicare: What to Compare

Before deciding whether to stay on employer coverage or move to Medicare, compare the real costs and benefits.

What About Prescription Drug Coverage?

If you delay Medicare and stay on employer coverage, you also need to know whether your prescription drug coverage is considered creditable.

Creditable drug coverage means the coverage is expected to pay, on average, at least as much as standard Medicare Part D coverage. If your drug coverage is not creditable, you could face a late enrollment penalty later.

Each year, your employer plan should provide a notice explaining whether the drug coverage is creditable. Keep that notice.

Spouse Coverage Can Complicate the Decision

If your spouse is covered under your employer plan, do not only compare your own Medicare costs. Look at what happens to your spouse if you leave the group plan.

Sometimes one person moving to Medicare causes the spouse or dependents to lose affordable coverage. Other times, Medicare is still the better move. You need to run the numbers before changing anything.

Common Mistakes to Avoid

• Assuming employer coverage always lets you delay Medicare.
• Confusing COBRA with active employer coverage.
• Keeping HSA contributions going after Medicare starts.
• Missing the Special Enrollment Period after employment or coverage ends.
• Ignoring whether drug coverage is creditable.
• Assuming HR understands Medicare rules perfectly.
• Waiting until retirement month to ask questions.

What to Ask HR or Benefits

Use direct questions. You do not need to sound like a Medicare expert.

Bottom Line

Medicare and employer coverage can work together, but the rules are not the same for everyone.

If you are working past 65, your decision should be based on employer size, active employment status, drug coverage, HSA rules, spouse coverage and total cost. Do not assume. Get the details before you delay Medicare or leave employer coverage.

This page is for educational purposes only and is not legal, tax, financial or medical advice. Medicare rules can vary based on employment status, employer size, plan type and individual circumstances. Always confirm details with Medicare, Social Security, your employer benefits department, your plan administrator or a qualified professional.