MANY OF US can easily remember when the norm was that retirement, Social Security and Medicare all hit at the same time.
That is because we were retiring and we were signing up for Social Security and Medicare, so we knew what to do (… kinda, mostly…).
So much for norms, because now many of us are working and plan on continuing to work (for any number of reasons that are pretty obvious to most of us) when the big 65 hits.
That seems to confuse an already confusing situation.
Thus let’s take a quick look at the Medicare side of that scenario, understanding that we’ll focus on what happens to most people, most of the time, not every possible nuance, OK?
Let’s do it.
First, if you worked for 10 years or more in the U.S., you’re eligible for premium-free Part A (think, hospital) any time from 65 on, and you will not have a late enrollment penalty if you wait.
Many of us who are still working just go ahead and enroll in Part A because … why not?
Sure, you still have your employee insurance, which will probably pay as primary, but the Part A is free.
What about Part B (think, doctor), which has a premium?
You’ve heard that if you don’t enroll when you’re supposed to (age 65), there’s a penalty, right?
Right, except that if you’re covered by insurance from your or your spouse’s work, you’ll be eligible for what’s affectionately referred to as a Special Enrollment Period (SEP).
That means that you’ll have an eight-month window from the time your current work or coverage ends (whichever comes sooner) to enroll in Part B without incurring the dreaded penalty or the wrath of Zeus, so you probably don’t need to spend money on the Part B premium now, and you won’t get hurt when you do sign-up.
Heads up: You will not get this SEP if you delay enrollment while covered by retiree insurance (rare, anymore, but it still happens) or if you’re self-employed and covered by an individual plan, meaning that it only covers you.
That means you’d have to wait to enroll until the next General Enrollment Period (Jan. 1 through March 31 of each year), which would kick in the following July 1, and you’ll probably get slammed with the penalty.
Don’t do that.
So, how about Part D (think, prescription drugs)?
Good question.
You’ve probably also heard that there’s a penalty associated with Part D plan premiums if you don’t enroll in one when you’re first eligible.
That’s right, unless you have creditable coverage under your employer’s plan.
That means that your employer’s drug coverage is equal to or better than Medicare Part D’s basic coverage.
If it is (and it often is), you should get a notice each year, around September, telling you so.
Hang onto these notices and put them somewhere you can actually find them, because they are your proof that you had a creditable coverage all along, so you will not incur said penalty.
When you do stop working/lose coverage, you’ll have up to a two month SEP to sign up for a Part D plan with no penalty attached.
We like that.
Some other questions that come up a lot:
• How does current employee insurance coordinate with Medicare if I am eligible for Medicare because I’m 65 or older?
Current employee insurance from your or your spouse’s work pays primary (meaning, pays first) to Medicare if your employer has 20 or more employees.
Current employee insurance pays secondary (right: pays second) to Medicare if the employer has fewer than 20 employees.
• What protections do I have if my employer coverage pays primary?
Once you are eligible for Medicare, your employer cannot offer you coverage that’s different from the coverage offered to non-Medicare employers, or refuse to cover you or restrict your coverage.
Further, your employer’s health insurance plan cannot charge you more than the non-Medicare employees, pay providers less, require you to wait longer for coverage to begin or end your coverage because you made the strategic error of becoming Medicare-eligible. (I was kidding about the “error” part).
• Cool. So, now I know everything I need to know?
Are you kidding?
No, but you hopefully know enough to avoid making cataclysmic mistakes, take some fear or confusion away and ask better questions.
Remember, medicare.gov really is a pretty consumer-friendly source of information if you take your time and read stuff several times.
Also, you can always call any of the numbers at the end of this column for help and decent people will help you without trying to sell you anything.
Last thought for today, and you’ve heard me say this before: You are not required to retire.
Neither Social Security nor Medicare nor any available solstice requires or demands that you stop working.
What you do need to do is understand how these things are done (which is not as complicated as we often imagine), then go about your life, because the rest of it is up to you.
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Mark Harvey is director of Clallam/Jefferson Senior Information &Assistance, which operates through the Olympic Area Agency on Aging. He is also a member of the Community Advocates for Rural Elders partnership. He can be reached at 360-452-3221 (Port Angeles-Sequim), 360-385-2552 (Jefferson County) or 360-374-9496 (West End), or by emailing harvemb@dshs.wa.gov.
