Can I Work and Have Medicare?

Whether it’s to afford retirement or because they love their job, Americans are working later in life. Some people, maybe even you, will still be working when they become eligible for Medicare. Can you work and enroll in Medicare, and if you choose not to enroll, will you get a penalty?

Can You Have Medicare While Working?

Yes. If you’re working when your Initial Enrollment Period (IEP) begins, you can enroll in Medicare as long as you meet the eligibility rules. You can also choose to delay your Medicare coverage, though in some situations you may be penalized later. If you don’t get health coverage through work, you should generally get Medicare coverage when you’re first eligible.

What If I Have Coverage Through Work?

If you have health insurance through your or your spouse’s current employer when you become eligible, you’ll need to decide whether to enroll in Medicare Parts A, B and/or D. The decision depends on the type of coverage and the size of the employer.

• Fewer than 20 employees: you’ll probably want to enroll in Parts A, B and D when you become eligible. Medicare usually becomes your primary coverage.
• 20 or more employees: you may be able to delay Parts A, B and/or D if your group coverage is sufficient and you won’t face late-enrollment penalties. Medicare usually pays second to group coverage from larger employers.

Generally, you should consider enrolling in Part A when you qualify, since most people pay no premium for it and it can work alongside your job-based coverage. (If you contribute to a Health Savings Account, talk with your employer first, because enrolling in Medicare affects HSA contributions.) It may not make sense to enroll in and pay premiums for Parts B and D right away.

Before deciding to delay any part of Medicare, compare your current coverage to see what makes sense. A licensed insurance agent or your employer’s Human Resources department can help.

When Could Delaying Lead to a Penalty?

If you have group coverage based on your or your spouse’s current employment, you can usually delay Parts A, B and/or D without a penalty. You could be at risk for late-enrollment penalties if:

• The employer has fewer than 20 employees and you delay Medicare;
• Your coverage comes through a domestic partner’s job and you aren’t married; or
• Your employer’s drug coverage isn’t creditable, or you go 63 days or more without creditable drug coverage.

What Happens When I Retire?

When your employment or your group coverage ends (whichever comes first), you get a Special Enrollment Period. It starts the month after and lasts eight months, and you can usually sign up for Parts A and B without a penalty. (To avoid a Part D penalty, join a drug plan within 63 days after your creditable drug coverage ends.) If you don’t enroll in Parts A and/or B during this SEP, a penalty may apply when you do enroll.

Working and Medicare can go hand in hand. Whether you enroll while you’re still working or rely on coverage through your job, look at your options to make sure your choice is right for you and to avoid a costly penalty.

Read more: Medicare.gov, Working past 65

Want help with your situation? Request a plan review or call a licensed insurance agent at (832) 734-6825 (TTY 711). There’s no cost for my help and no obligation.