In the last few months, I’ve helped four or five people who continued working after they turned 65. Some had kept their employer health insurance while others had enrolled in Medicare. They all had questions, and the answers depended on each person’s particular situation.
I had a call today from a woman who has a good job with good health insurance. She turns 65 in April 2014. She has two masters degrees, but she says she is confused about the rules for enrolling in Medicare.
GOOD EMPLOYER HEALTH INSURANCE
I was able to quickly answer this woman’s questions because Medicare rules are quite clear: If you have employer health insurance (from a company with more than 20 employees) when you turn 65, you can keep it. You do not need to enroll in Medicare Part B and pay the premium (currently $104.90 per month).
When you finally retire, you will pay no late-penalty if you enroll in Medicare Part B – but you will need to get a form filled out by your employer that says you have had health insurance. (This information is clearly stated on page 22 of the Medicare & You Handbook.)
I sent this woman the form she will need to enroll in Medicare Part B with no late-penalty when she stops working. She will send this form to Social Security along with an application for Part B.
LAST-MINUTE ENROLLMENT IN MEDICARE PART B
In December, the wife of a client told me she is still working, but her employer health insurance is not very good. I met with Sheila in early-December and she was ready to enroll in a Medicare Advantage plan. I asked to see her Medicare card and then I realized she had Part A but not Part B.
Sheila was going to drop her employer coverage as of January 1st, but she was not yet enrolled in Medicare Part B. Yikes! She did not have much time to get her Medicare Part B set up and then enroll in the Medicare Advantage plan she had chosen. I told Sheila it was possible to get everything done by the end of December – if she made all the right moves.
I emailed Sheila the Part B enrollment form and the form for her employer to fill out. I told her to take those forms to Social Security. Sheila called Social Security and was told it would take more than a month to get her Part B set up. Whaaaat? I knew this was wrong because I have had many clients like Sheila set up their Part B near the end of the month – and their Medicare began just a few days later. I told Sheila to call Social Security again and that she would most likely get a different answer. She made the second call and got the answer I expected.
Sheila took the forms to the Social Security office in Tucson and there was a long line of people ahead of her. Somehow she got the phone number for the Campbell Avenue office and called it. She talked to someone who said she could fax the forms. Yikes! I was afraid they would get lost and never processed. But the forms got processed and they faxed Sheila a letter confirming her enrollment in Medicare Part B. Wow! I was impressed by the efficiency of the Tucson Social Security office.
Sheila was in the Medicare system and her Medicare Advantage plan went through with no problem.
PART D (drug coverage) LATE-ENROLLMENT PENALTY
I’m pretty sure I told Sheila about this, but I think she forgot. Sheila emailed me today saying she received a letter from UnitedHealthcare saying her Medicare record showed she did not have Part D drug coverage after she turned 65 – and she would face a late-enrollment penalty now that she had enrolled in a Medicare Advantage plan that includes Part D. (She is 67.)
I told Sheila to read the letter more carefully and she swill see that it is asking her if she had drug coverage since she turned 65. It provides a list of likely sources for drug coverage such as the VA or an employer health plan. Sheila just needs to check the box to affirm that she had employer health insurance with a drug plan.
The Medicare Advantage plan Sheila enrolled in needs to let Medicare know that Sheila had drug coverage and does not face a Part D late-enrollment penalty.
I signed up a lady last March in a Medicare Advantage plan. She was 72 years old and had never had Part D. This woman enrolled in a chronic illness Advantage plan, so she was able to enroll during a “special enrollment period”. But she is paying $27 per month for a plan that does not have a premium. The $27 is the penalty she pays for not having been enrolled in Part D for seven years after she turned 65.
STANDARD LETTER REGARDING PART D
Anyone who works past 65 and keeps their employer health insurance will get this letter when they finally enroll in Medicare. If they get a stand-alone Part D plan, or if they enroll in a Medicare Advantage plan with Part D included, they will get this letter. It’s not a big deal, but people get worried that they did something wrong and will face a penalty. The letter is just part of the process and it’s no big deal – as long as they don’t ignore the letter. Send back the form and everything will be okay.