Should you enroll in Medicare if you have employer coverage? The answer is less complicated than some would suggest, but it depends. If you or your spouse is actively working and you get health insurance from that employer, you might not need to enroll. You need not sign up for Medicare if there are at least 20 people employed at the job.
Before deciding not to enroll in Medicare, speak with your employer’s insurance company and call Social Security at 800-772-1213 to make sure you do not need to enroll. Keep in mind that COBRA and retiree coverage are not considered employer coverage. To be more specific:
If you and your spouse are not actively employed: Medicare becomes your primary insurance when you turn 65, even if you have not signed up. Any health insurance you have, including retiree insurance from your former employer, pays only after Medicare pays and will not pay if you are not enrolled in Medicare. You should enroll in Medicare during the seven-month initial enrollment period beginning three months before your birthday month. If you do not enroll then, you will not be able to enroll until the general enrollment period, between January and March, and you will pay a 10 percent premium penalty for each year you are not enrolled.
If you or your spouse is actively employed: Whether you must sign up for Medicare depends exclusively on whether there are 20 or more employees at your or your spouse’s job.
- Your job coverage remains primary only if there are at least 20 full-time employees actively working at the job; in that case, you (and your spouse if your spouse receives coverage through your job) do not need to enroll in Medicare Part B. You will get Medicare Part A hospital insurance automatically if you are receiving Social Security benefits, since Part A is free. (Call Medicare at 1-800-633-4227 if you need to sign up for Part A benefits.) Your Medicare Part A coverage will serve as secondary insurance, covering costs for hospital services after your employer coverage pays.
- However, if there are fewer than 20 full-time employees, Medicare must be your primary coverage, and you must enroll in Medicare during the initial enrollment period. Your job coverage will pay only after Medicare pays.
You have the right to sign up for Medicare any time after you become eligible so long as you have coverage through your or your spouse’s employer and the employer has 20 or more employees. Once you retire or decide to drop that coverage, you have an eight-month special enrollment period.
For a simple overview about what to think about when enrolling in Medicare, click here.