A step-by-step guide to working past 65
If you or someone in your life is planning to keep working after 65, Medicare might not be top of mind. Even if retirement is still years away, there are Medicare decisions to make. Wellmark is here to help make the transition to Medicare as smooth as possible. Let’s walk through the three steps you can take — before and after age 65 — to avoid late enrollment penalties, unexpected coverage gaps and unnecessary stress.
Step 1: Decide if you need to enroll in Medicare Part A or Part B, both or neither
Your Initial Enrollment Period (IEP) is your first chance to enroll in Medicare. This is a seven-month window that includes the three months before you turn 65, your birthday month and the three months following your birthday.
Medicare is made up of four parts:
- Part A provides hospital coverage for inpatient stays, skilled nursing and hospice.
- Part B covers doctor visits, durable medical equipment and lab services.
- Part C, also called Medicare Advantage.
- Part D prescription drug coverage.
You may not need to enroll in all parts of Medicare right away at 65. While many people choose to enroll in Part A at 65 (especially since it usually has no premium), individuals who contribute to a health savings account (HSA) should carefully consider the impact on HSA eligibility before enrolling. You may also be able to delay Part B and Part D without penalty.
You should consider signing for Part B if your employer has fewer than 20 employees.
You should sign up for Part D if:
- You plan to enroll in Part A and/or Part B at 65.
- You don’t have creditable drug coverage from your employer.
What is creditable drug coverage?
Creditable drug coverage must pay, on average, as much as the standard Medicare prescription drug plan. Your employer-sponsored health coverage is creditable if it meets or exceeds the plan standards set by Medicare. Your employer is required to inform you each year if your drug and health coverage is or isn’t creditable. If it isn’t and you don’t enroll in Medicare Part D during your IEP, you could be charged a late enrollment penalty. And, in many cases, you’ll likely have to pay this penalty for as long as you have Medicare coverage.
If you’re approaching your IEP, talk to your employer about whether your current coverage is creditable and if you’ll be required to enroll in Medicare at 65. Having these conversations early will help you plan financially for this transition and avoid a potentially costly mistake.
Learn about Medicare enrollment periods and more
Even if you plan to delay enrollment, don’t wait to learn about Medicare. Request a free Medicare Supplement Coverage Guide to learn the Medicare basics, find out when to enroll and see available plans.
How employer size impacts when you enroll in Medicare
Some employers, like those with fewer than 20 employees, may require you to enroll in Medicare even if your coverage is creditable. In this case, your Medicare coverage would be your primary health insurance. Your employer-sponsored plan would then help pay for any services not paid for by Medicare. Be sure to talk to your employer about how Medicare works with your employer-sponsored plan.
Step 2: Pay attention to your HSA contributions
If you currently have a high-deductible health plan and contribute to an HSA, you’ll need to make sure you stop any contributions at least six months before you enroll in Medicare. Once you turn 65 and enroll in Medicare Part A and/or Part B, you can no longer contribute to an HSA, but you can use any existing HSA funds tax-free to pay for qualified medical expenses.
Here’s where some long-term planning can make all the difference. When you turn 55, the annual contribution limit for your HSA increases by $1,000. If you have a qualified high-deductible health plan from your employer, you’ll be able to put an extra $1,000 towards your account each year until you enroll in Medicare, even after you turn 65 as long as you’re not enrolled in Medicare Part A and/or Part B. When you eventually transition to Medicare, you’ll be able to use those extra funds to help pay for health care costs that Medicare doesn’t fully cover.
Step 3: Make a plan for after retirement
After you retire, you’ll have an 8-month Special Enrollment Period when you can enroll in Medicare Part A and Part B. If you don’t enroll in time, you may have to pay a late enrollment penalty or even have to go without health coverage until the next Medicare General Enrollment Period. It’s never too early to start learning about your Medicare options and what coverage you may need.
Think about how you currently use your health benefits, what providers you see and any medications you take. You’ll need to make sure your Medicare coverage offers what you need at a price you can afford. Original Medicare (Part A and Part B) doesn’t cover everything. If you’re already enrolled in Original Medicare, you may find that out-of-pocket costs can add up fast once you retire — especially if you didn’t contribute to an HSA while you were working.
This is why many people decide to enroll in other coverage, like a Medicare Supplement plan, from Wellmark. We offer several plans to choose from at a variety of price points. And a Wellmark Medicare expert will get to know your health needs and help you find a plan that works for you. Ready to start planning? Call 800-245-6106 (TTY: 711) to learn more about your options.
It depends. You may be able to delay enrollment in Medicare Part B if you have health coverage through your employer and if your employer has 20 or more employees. You may also want to consider delaying enrollment in Medicare Part D if you have creditable prescription drug coverage through your employer.
Many people choose to enroll in Part A, even when they have creditable coverage. If you currently contribute to an HSA, it’s important to understand how Medicare enrollment may affect your ability to make future HSA contributions.
If your employer has less than 20 employees, you should enroll in Original Medicare as soon as you’re eligible.