Before you make the ultimate decision, you should understand how your employer’s insurance can work with Medicare. Depending on the number of employees at your workplace, your employer insurance will either be the primary or secondary source of coverage. By having reputable coverage with your employer at the time of your eligibility, you may be able to avoid the late enrollment penalty when you do sign up for Medicare, but this is not always the case.
Turning 65 or over 65 and still working
If you are not receiving Social Security benefits at least four months before you turn 65, you will need to sign up with Social Security to get Original Medicare. Depending on your employer’s size, you can wait to get Original Medicare without having to pay the penalty if you enroll later. This is called a group health coverage plan. Enquire with your employer to determine if this is the case for them to avoid paying the penalty for enrolling in Medicare late. You shouldn’t pay a late enrollment fee if you work in a company with more than 20 employees because your group health plan pays first so Medicare is a secondary source of coverage. In this case, it is better to enroll later if your plan is to work still because you will have to pay Part B premium for coverage you will not use yet, and since you have creditable coverage you will not pay Part B late enrollment penalty.
The situation is the same if you are over 65 and still working. However, if you work in a company. with less than 20 employees be aware that Medicare pays first. This means that Medicare is your primary source of coverage and your employer group health plan is a secondary source of coverage. In this case, it is better to drop your group health plan, because if you enroll in Part B later you will need to pay a fee due to late enrollment as long as you use Medicare as coverage.
Under 65 with a disability
If you are under 65 but have a disability, you will automatically be enrolled in Medicare if you received disability benefits from Social Security or the Railroad Retirement Board for no less than 24 months. If you are working and covered by employer insurance, your employer insurance will be your primary source of coverage if there are more than 100 employees.
After Employer Coverage Ends
After your employer coverage ends, you may be able to get coverage through the Consolidated Omnibus Budget Reconciliation Act (COBRA), which will allow you to continue your health insurance through your employer’s plan for a period of time at a higher cost to you. Whether or not you choose to get COBRA coverage, you will have an eight-month grace period to sign up for Part B without a penalty. If you are already receiving COBRA coverage when you apply for Medicare, your COBRA coverage will end. COBRA coverage is always second to Medicare coverage.
To know if your employer insurance provides primary or secondary coverage, contact your Human Resources department. For more questions regarding your eligibility for Medicare, give Temmen Insurance a call at 417-633-7200.