Do I Need Medicare If I Work Full-Time?

If you're still working at 65, what are your options for Medicare coverage?


Often times we get the question, “I turn 65 in two months, but I am still working full time; do I need to enroll in Medicare and Social Security.”


It’s important to sign up for Medicare at the correct time, even if you are still working and don’t need the coverage yet. You can first claim Medicare benefits during a seven-month period that begins three months before the month you turn 65. If you don’t sign up during this initial enrollment period, your monthly Part B premiums may increase by 10 percent for each 12-month period you were eligible for Part B but didn’t claim it.


Many seniors are no longer employed at age 65, and thus rush to sign up for Medicare as soon as they’re able. However, if you are still working and covered by a group health plan based on your or your spouse’s current employment after age 65, you can avoid Medicare’s late enrollment penalty if you sign up anytime you’re still covered by the group health plan or within eight months of leaving the job or the coverage ending. Additionally, keep in mind that if you have coverage under a group health plan through an employer with 20 employees or more, then you don’t have to enroll in Medicare right now. But if your employer has less than 20 employees, you need to take Medicare Parts A and B, because that will be your primary insurance.


Should you not sign up for Prescription Coverage, or Part B when you are either first entitled or when you first don’t have other coverage, you will be subject to a late enrollment penalty. Please note also, that COBRA coverage and retiree health plans are not considered coverage based on current employment for the purposes of avoiding the late enrollment penalty. There’s also a late enrollment penalty that is applied to Medicare Part D premiums if you don’t sign up when you are first eligible or go 63 or more days in a row without prescription drug coverage.


Working after age 65 can certainly help your retirement finances. You can continue to save for retirement and your existing savings will have more time to grow before you begin withdrawals; furthermore, the number of retirement years you need to pay for will be shorter. Also, working after turning 65 can be good for your Social Security payments. Most baby boomers, however, aren’t eligible for unreduced Social Security payments until age 66, and for people born in 1960 or later, the full retirement age is 67. Payments further increase by 8 percent for each year you delay claiming up until age 70. Should you decide to sign up for Social Security benefits before your full retirement age or if you are still working, part or all of your payments could be temporarily withheld. Social Security beneficiaries who are younger than their full retirement age will have $1 in benefits withheld for every $2 they earn above a certain threshold (reference your social security website for more detail). When you are full retirement age, you can earn any amount without having your benefit withheld and social security payments are recalculated to give you credit for any withheld benefits.


For more information on this subject, and to avoid making any wrong decisions which can effect your Medicare and retirement benefits, please reach out to a HRBC representative to help answer these critical questions at 1-877-651-7526 TTY: 711.