Ask Fitz -- Maura O'Toole (copy)

Maura O'Toole

Suppose you retire at 65 and are not already receiving Social Security or Railroad Retirement benefits. In that case, you will need to sign up for Medicare Pars A and B during your 7-month Initial Enrollment Period and enroll in a Part D drug plan or Medicare Advantage or Medicare Supplement plan. But what if you are still working? One of the most common situations that raises questions about Medicare coverage and enrollment is when someone turns 65 and is eligible to enroll in Medicare but is still working and covered by their employer’s health plan. What you have to do if you are still working and turn 65 depends on your individual situation and also the size, in terms of employees, of your employer.

If you are working for an employer with less than 20 employees, the answer is different than if you are working for an employer with greater than 20 employees. But first, let’s go over a few important definitions. If you have both Medicare and health insurance through your employer, each is called a “payer.” When there’s more than one payer, “coordination of benefits” rules decide who pays first. The “primary payer” pays the part of your medical bills it owes first and then sends the remainder to the “secondary payer” to pay their part. The primary payer pays up to the limit as defined by their policy. The secondary payer then pays if there are additional costs not covered by the primary payer. The secondary payer, which could be Medicare, may not be required to pay all the uncovered costs. If your employer insurance is the secondary payer, you may be required to enroll in Medicare Part B before your insurance pays its part.

Now that we have defined some of the critical components of how Medicare Works with employer group coverage, let’s look at those two situations with employers of different sizes:

You work for an employer with LESS than 20 employees

Employees covered by their employer’s health insurance MUST enroll in Medicare Part B. For companies with less than 20 employees, Medicare considers the employee’s primary insurance to be Medicare and the employer health insurance as secondary coverage.

You work for an employer with MORE than 20 employees

Employees covered by their employer’s health insurance DO NOT have to enroll in Medicare Part B. Medicare considers the health insurance provided by their employer to be the primary insurance, and Medicare as secondary. Some people choose to enroll in Part A anyway since there is usually no premium, but since Part B has a premium, most will not enroll. However, if you contribute to an HSA, do not enroll in Part A as HSA rules prohibit contributions to an HSA if you are enrolled in Medicare. 

If you have questions about your situation, talk to your employer’s HR representative or an independent agent knowledgeable about Medicare and employer rules.

If you work for an employer with more than 20 employees, turn 65, and do not enroll in Medicare, you are deferring enrollment into Medicare. Once you retire, you will be given an eight-month Special Enrollment Period that begins the month after employment ends or the group health plan insurance based on current employment ends, whichever happens first. You will also not be penalized for late enrollment in Medicare in this situation. If you live in Central New York and are unsure about how these rules apply to you, Medicare Advisor Maura O’Toole from the FitzGibbons Agency can help, just give her a call at 315-312-0803.


Have further Questions? Just Ask Fitz!

Maura O’Toole

FitzGibbons Agency

44 E Bridge St, Suite 1

Oswego, NY 13126

(315) 312-0803


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