Working After Turning 65

LewB

Expert
83
I just wanted to make sure I understand the options for someone who continues to work after turning 65.


There are more than 20 employees where you work, when you retire

You have 8 month to signup for Part A & B
After you sign up for Parts A & B you have six months of open
enrollment to sign up for a Med Supp
You have two months to sign up for a PDP

There are 20 or less employees

You must sign up for Part A & Part B when you turn 65 or face a late
enrollment penalty
Once you retire you have 63 days to enroll in a Med Supp
(Guarantee Issue A, B, C, F, K, or L)
Two months to enroll in a PDP
 
ETA:

appt going to be late, so here goes (caveat: I don't know everything and I am sure I am wrong about 10% of what I am writing but good to have a straw man)

Assuming this persons doesn't have to deal with IRR stuff:

Signing up for part B is what starts the open enrollment for sups. They can take (free) part A at 65 in either scenario. I don't really know why someone eligible for free part A would not sign up because it can reduce their OOP because you have coordination of benefits between Medicare and employer plan. ANyone know why you wouldn't take premium-free Part A?

About part B, LEP for employers of 20 or less is not consistent. One agent said there was a LEP assessed for a client, others (including me) have not had that experience. However, the employer's insurance may require them to sign up for B when aging-in. I have a client where they did not require it.

If they didn't sign up for B at 65, they have the same 8 month period to sign up for B after employment ends, that would start the med sup open enrollment clock same as someone with over 20 employer.

ok, there's your strawman.
 
Last edited:
Also to add to the mix...

Electing COBRA coverage does not grant a beneficiary a SEP into Medicare Part B when COBRA ends. So, if someone is electing to stay on COBRA they will need to enroll in Part B to avoid any delays or penalties.
 
One reason to continue working and not take premium free Part A is that you won't be able to contribute to an HSA once you start any part of Medicare.
 
ETA:

About part B, LEP for employers of 20 or less is not consistent. One agent said there was a LEP assessed for a client, others (including me) have not had that experience. However, the employer's insurance may require them to sign up for B when aging-in. I have a client where they did not require it.

The LEP for not signing up for Part B if your employer has 20 or less employees is the most confusing to me. I called the folks at social security and they told me that if a person continues to work past age 65 and their employer has less than 20 employees, if they do not sign up for Part B when they turn 65 they will be subject to the Part B LEP.

This directly contradicts whats in the Medicare and You Book which is why I find this this subject very confusing.
 
This is a very tricky area and is completely confused not only by the general public but by Employers, Insurance Companies, Social Security, Medicare, and the SHIIP programs. I have 43 years Medicare experience (26 with Social Security, 17 in private business). I have repeatedly questioned this confusing information and finally researched it for myself. In spite of the fact that the NC SHIIP publications state if there are less than 20 you MUST file for Part B, the L564 form used to verify employer coverage for SEP documentation (submitted with the 40B enrollment form) does NOT verify the # of employees. From Social Security's Employee Operating Instructions (POMS) this section clearly states employer size is not a concern relative to SEP, or application of the LEP. The 20 employee rule is for determining Primary vs Secondary payor. I have tried several times to get NC SHIIP to correct their information to no avail. It seems that a lot of folks have crossed the rules on these two situations, SEP vs Secondary Payor. I may not be totally correct, but this is my understanding after all these years.

This "hidden" info is available to the public from the SSA website, click on Information for Appointed Representatives, and the POMS will be on the left side. You can also do a keyword search using just the reference.

"POMS HI 00805.266 Description of Terms Used in the Special Enrollment Period and Premium Surcharge Rollback Provisions
A. Description of terms

The terms described in this section are those used with the special enrollment period (SEP) and premium surcharge rollback. They may or may not be the same terms used for Medicare as secondary payer. You must use the following description of terms to decide:

if an individual is eligible for the SEP,

when the SEP should begin, and

whether a premium surcharge rollback will apply and for what months.

TERM


DESCRIPTION

Group Health Plan (GHP)


The term GHP refers specifically to a group health plan based on the current employment status of the beneficiary or the beneficiary’s spouse. The GHP can be of any size, however when referring to a GHP for the disabled, the term refers to a plan of any size below 100 employees.

A GHP is any plan of, or contributed to by, one or more employers to provide health benefits or medical care (directly or otherwise) to current or former employees, the employer, or their families.

Medicare Secondary Payer (MSP) Provisions


Medicare is secondary payer for services covered under any of the following:

Group health plans of employers that employ at least 20 employees and that cover Medicare beneficiaries age 65 or older who have coverage under the plan by virtue of the individual’s current employment status with an employer or the current employment status of a spouse of any age.

Large group health plans of employers that employ 100 or more employees and that cover Medicare beneficiaries who are under age 65, entitled to Medicare on the basis of disability, and covered under the plan by virtue of the individual’s or a family member’s current employment status with an employer.

Medicare is secondary for these individuals even if the employer policy or plan contains a provision stating that its benefits are secondary to Medicare benefits or otherwise excludes or limits its payments to Medicare beneficiaries."

As stated by TN_Agent, the 20 employee rule also depends on the Employer Group Health Plan. Some require the individual to get Part B, others do not. I would suggest getting written documentation from the employer that the individual is NOT required to get Part B.

Sorry this post is so long, but trying to help clarify with documentation as opposed to an "I think". I learn new stuff every day, and find stuff I was wrong about as well. This is a constant learning situation!
 
Cobes is correct.

Basically, if Medicare is supposed to be your primary insurance, you need to take it or face a penalty. If you're employed by a small company that does not have a Medicare primary requirement, then you will not face the penalty. Talk to the HR department to verify the plan is set up.

The only reason I have ever come across for not signing up for Part A is the HSA account - especially if there's an employer match.
 
I called the folks at social security and they told me that if a person continues to work past age 65 and their employer has less than 20 employees, if they do not sign up for Part B when they turn 65 they will be subject to the Part B LEP.

That's because some of the folks at SS are idiots.

I probably run into half a dozen people every year that signed up for B based on some SS flunky's advice.
 
I also agree with unic.consulting's statement that the only reason to delay Part A is the HSA situation. Another twist to this is that if an individual inadvertantly delays signing up for Part A, and later does so, SSA will grant 6 months of retroactive coverage, which could affect the HSA contributions already made.

If an employee is having to pay a relative high premium, and sizeable deductibles/co-pays, they may be better off to voluntarily leave employer coverage and go to Medicare A/B/D with either Supp or Advantage. A lot depends on the employer plan, as well as the health of the employee. If the employer plan pays well on RX and the employee is on a lot of high dollar RX, they may want to keep the employer plan in spite of the higher premium and deductibles/co-pays.
 
I agree with Cobes. I usually suggest if a person is paying under $200/month, they tend to have a good deal with the employer and if over, Medicare primary might be a better spot.

One thing I throw out is that if it is a judgement call, ie many pros for keeping the group and many pros for Medicare, no glaring negatives, sometimes the mental hurdle of "crossing your healthcare" off the list is worth a lot. Gets the employee one step closer to retiring and more flexibility on cutting back hours, walking into the bosses' office saying , "I quit!".

I've had a few people on the fence use that as motivation to enroll .
 
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