Social Security Matters: Ask Rusty – Working at 65, so what about Medicare?
Published 11:37 am Sunday, November 10, 2019
by AMAC Certified Social Security Advisor Russell Gloor, Association of Mature American Citizens
Dear Rusty: My husband turns 65 in December of this year, but he is employed and will be on his employer’s health insurance at least through this school year (May 2020). How should we inform Medicare of this situation and must we let Medicare know that he is presently insured by BCBS? When must we let Medicare know about these details? I know there is a certain window when no health questions are asked but what is that time frame? If my husband quits teaching in May, when does he let Medicare know he wants to start Part A and B in June 2020? Is there only open enrollment in the 3-month window of his birthday? Signed: Confused by Medicare
Dear Confused: If your husband has creditable healthcare coverage from his employer, he need not enroll in Medicare when he turns 65. His creditable employer coverage will exempt him from a late enrollment penalty when he enrolls in Medicare Part B (or D) later (“creditable” coverage is a group plan with at least 20 participants). When his employer coverage ends he will enter a Special Enrollment Period (SEP) which will last for 8 months from the date his employer coverage ends. As long as he enrolls in Medicare Part B before his SEP expires, your husband will not incur a late enrollment penalty. To sign up for Part B shortly before his employer coverage ends or during the 8 months after his employer ends, he should complete and submit an Application for Enrollment in Part B (CMS-40B) and a Request for Employment Information (CMS-L564), both of which can be found at this website: https://www.cms.gov/Medicare/CMS-Forms/CMS-Forms/CMS-Forms-List.html.
Your husband may want to enroll in Part B prior to his employment coverage ending in order to avoid a lapse in healthcare coverage (it usually takes a couple months for Medicare Part B to become effective). Note that unless your husband is contributing to a Health Savings Account (HSA), he may wish to enroll in Medicare Part A at age 65. Medicare Part A (hospitalization coverage) is free if your husband is also eligible for Social Security, and he will need to be enrolled in Part A in order to enroll in Part B (doctors and outpatient services) and Part D (prescription drug coverage), both of which have a premium associated with them. He will also need to be enrolled in Part A to collect Social Security after age 65.
If your husband is already collecting Social Security when he turns 65, he will be automatically enrolled in both Part A and Part B, but he can, if desired, decline Part B until his employer coverage ends. Please also note that if your husband wishes Part D prescription drug coverage (provided by private insurance carriers) he must enroll in a plan within 63 days of his existing employer drug coverage ending to avoid a Part D late enrollment penalty. After age 65, one cannot go more than 63 days without creditable prescription drug coverage without incurring a late enrollment penalty for enrolling in a Part D plan later.
For your awareness, if your husband does not enroll in Medicare before his SEP expires, he will not be able to enroll again until the General Enrollment Period (GEP) the following year (the GEP runs from January through March of each year, for coverage to start on July 1 of that year). I suggest your husband enrolls in Medicare a couple months before his employment ends (to avoid a lapse in coverage), but in any case he should not miss enrolling during the special enrollment period, because the late enrollment penalties are significant and are recurring (he’ll pay the premium penalty for the rest of his life).
Finally, there is no “window” for qualifying medical questions to be asked when enrolling in Medicare; everyone who is eligible by virtue of paying FICA payroll taxes, or via a spouse who did so, is covered regardless of their current health.