Should I sign up for Medicare when I turn 65?

The popular perception is that your 65th birthday marks the milestone in your life when you get to walk out the office, kick back and reap the fruits of your labor as you enjoy sunsets from your porch.

For some, that perception is becoming a thing of the past. 

Nowadays, many people turning 65 and reaching Medicare eligibility are choosing to keep working. Some do it for financial reasons and others continue to work simply because they enjoy it.

The number of Americans 65 and older who said they were employed or looking for employment has increased from 10 percent in 1985 to 20 percent as of February 2019. And that number is expected to continue to rise according to the data from the Current Population Survey, a report by the U.S. Bureau of Labor Statistics. The Bureau estimates that by 2024, more than 13 million Americans 65 and older will be working.¹

But regardless of why you may choose to work past 65, not enrolling in Medicare during the right enrollment period could cost you in the form of Medicare premium penalties if you miss certain dates. So it’s important to approach the decision to delay enrolling with your eyes wide open.

 Here are some important points to keep in mind as you approach your 65th birthday.

Whether or not you can delay Medicare past 65 when you’re working really depends on a few simple questions.

1. Do you have employer health coverage?
2. Does your employer have 20 or more employees?
3. Is the coverage considered creditable?

 If you can answer “Yes!” to all the above, you likely qualify for a Medicare Special Enrollment Period and can delay enrolling without penalty. What’s the next step? Sign up to get Medicare when working past 65 resources and information sent directly to your inbox.

A pretty common situation to face, if your health care coverage is from a spouse’s employer, you may be able to delay Medicare or you may need to enroll when you first become eligible. In this case, the employer still needs to have 20 or more employees. However, the big difference is that employers can have rules for covered dependents 65 and older that may require the individual to get Medicare at 65 in order to remain on the employer plan.

 Therefore, if you have employer coverage through a spouse’s employer, you need to ask the employer’s benefits administrator directly about your Medicare enrollment choices.

If you’re approaching age 65 and any of the following situations apply to you, then you need to enroll during what's known as your Medicare Initial Enrollment Period (IEP). 

1. You are not going to keep working.
2. You have employer coverage from an employer with fewer than 20 employees.
3. Your spouse’s employer requires you to get Medicare to stay on their health plan.

If you don’t enroll during your IEP, you could face financial premium penalties for enrolling late.

Your IEP is a 7-month window that generally includes the month of your 65th birthday, the 3 months before and the 3 months after For example, if your 65th birthday is on June 20, then your IEP starts on March 1 and ends on September 30.

This is the time to learn about your Medicare coverage options and get what you do or don’t need coverage for. Most who have to get Medicare at age 65 will get Part A (hospital coverage), Part B (medical coverage) and some form of prescription drug coverage (Part D) – through either a stand-alone Part D plan or a Medicare Advantage plan.

Depending on your situation – such as if you still have or want to keep employer coverage – you may not need every part of Medicare available. But keep in mind here a simple rule: If you are not eligible for a Medicare Special Enrollment Period you need to get Parts A, B and D when you’re first eligible to avoid financial penalties.  Also, if you’re still working, it’s a good idea to check with your employer plan benefits administrator to see how Medicare might work with that coverage before making any final decisions.

Here are some helpful resources to learn how to avoid the Part B and Part D late penalties:

• Avoid the Part B Late Penalty
• Beware Unintended Part D Penalty

If you are receiving Social Security benefits (or Railroad Retirement Board benefits) when you turn 65, you’ll be automatically enrolled in Medicare Parts A and B, even if you’re working. Your Medicare card will arrive in the mail about 3 months before your 65th birthday.

Once you’re enrolled in Medicare, a monthly Part B premium will be automatically deducted from your Social Security check. If you don’t want Medicare Part B, you need to notify Medicare to opt out. There will be instructions for doing this on the back of your Medicare card.

If you’re not receiving Social Security or Railroad Retirement Board benefits, you will need to enroll yourself in Medicare when you become eligible.

When you work past 65 and qualify for a Special Enrollment Period, there is one tricky thing to note about this time period. The Special Enrollment Period lasts 8 months, but you only get the first two months to enroll in a Medicare Advantage or Part D plan.

Many people get tripped up by this because they do get the full 8 months to get Part A and Part B. And this is even trickier when you consider that you need both Parts A and B to get a Medicare Advantage plan, and either Part A or Part B to get a Part D stand-alone plan.

TIP: Enroll in everything you want and need within the first two months of your Special Enrollment Period to ensure you don’t accidently get hit with financial penalties for Part D.

Another good reason to enroll in the first two months is that it can take some time for plans to process your application. Make your decisions and enroll early to avoid a lapse in coverage.

Don’t delay making Medicare decisions and dealing with Medicare enrollment. Learn about the choices you have – can you delay, must you enroll – and then understand the implications of both as they relate to your overall health and financial well-being.

Late-enrollment penalties for Medicare Part B and Medicare Part D are permanent and can have a meaningful impact on your finances so think carefully about what you do and when.

Not sure where to start? A good first step for anyone approaching Medicare eligibility is to know when your enrollment dates are. You can quickly find your dates for your Initial Enrollment Period using our enrollment date calculator.