Many individuals work past 65 years old. They might choose to work to have a steady income or fill their time. Whatever your reason for working past 65, you might be wondering what to do about Medicare. Medicare age begins at 65 for most people, and you might need to enroll in Medicare Parts A and B at 65 to avoid the late enrollment penalty. However, having employer coverage can give you an additional option of coverage on top of Medicare Advantage plans and Medicare Supplement plans.
Working for a large employer
If you work for an employer with 20 or more employees and their health insurance covers you, that coverage is considered creditable for Medicare. That means you can delay Medicare past 65 while you actively work for this employer.
However, you can enroll in Part A only or Part A and Part B while working for a large employer. The large employer group insurance will be primary to Medicare.
Another option is to opt-out of the employer insurance while you continue working and get your coverage from Medicare. You could have Medicare and then enroll in a Medicare Supplement with a Part D or Medicare Advantage plan.
Working for a small employer
A small employer has less than 20 employees. If you actively work for a small employer past 65, you must enroll in Part A and Part B during your Initial Enrollment Period surrounding your 65th birthday month. Original Medicare Parts A and B will be primary to the small employer insurance. You would not need any additional plans when you have Medicare and employer insurance.
However, you can opt-out of the employer insurance and enroll in a Medicare Supplement with a Part D plan or a Medicare Advantage plan. You can compare the monthly premiums and potential out-of-pocket costs to determine what will be most cost-effective.
Is a Medicare Supplement plan necessary?
You may consider enrolling in a Medicare Supplement plan when you have Original Medicare only because there is no limit on your out-of-pocket costs with Original Medicare. Original Medicare has deductibles, copays, and coinsurance. A Supplement plan would help cover those costs for you. They are secondary plans that help pay the remaining balance after Original Medicare, so you don’t have to.
You would not need a Supplement plan when you have employer coverage because it is not necessary to have three different insurance policies. You’d likely be paying for a Supplement policy that is not covering any costs.
Is a Medicare Advantage plan necessary?
Like a Supplement plan, you will only consider an Advantage plan if you only have Original Medicare insurance. When you enroll in a Medicare Advantage plan, you must stay enrolled in Part A and Part B. Although, your Medicare benefits will be managed by your Advantage plan. Since that will be the only policy providing your benefits, you would not have a secondary insurance plan. Therefore, you would not need employer coverage while you have an Advantage plan or vice versa.
Do I need Part D?
While you have creditable prescription coverage from an employer, a Part D plan is unnecessary. You can enroll in a Part D plan once you don’t have creditable drug coverage. Part D is strictly coverage for the drugs you get from a pharmacy. You can experience coordination of benefits issues when you have multiple insurance policies that offer drug coverage.
You can continue to work past 65 and claim Medicare. Your coverage options and how Medicare coordinates with the employer insurance depend on the employer’s size. You will always want to compare all options to ensure you have the most cost-effective plan for your medical needs.