As people near age 65, many begin thinking about Medicare and how it fits into their health coverage. If they plan to work past 65, as an increasing number of Americans are doing, the decision to enroll can be more complex.  

According to employment data and projections from the US Bureau of Labor Statistics, 35.2% of people aged 65 and older were still in the workforce in 2023 and that number is expected to grow to 40.5% by 2033.  

If you plan to continue working past 65, you may be wondering what will happen to your health coverage. The answer depends on your individual situation and the size of your employer. If you’re approaching Medicare eligibility, understanding your options is key to staying protected and avoiding unnecessary costs.

Medicare is designed to help cover health care costs as you age or if you are under 65 and have a disability. Once you become eligible, you may be enrolled automatically – so it’s good to know how that process works and what steps you may still need to take.

If you’re automatically enrolled in Medicare, your red, white, and blue card will arrive in the mail about three months before your 65th birthday or your 25th month of disability benefits. In most cases, Medicare Part A is premium-free, so you’re already covered for hospital insurance. 

But don’t forget – you’ll still need to sign up for Medicare Part B to get medical coverage. And if you don’t have prescription drug coverage in place, delaying enrollment in Part B or Medicare Part D could result in late penalties.

If you’re still employed or have coverage through your spouse’s health plan, you may have options for delaying enrollment into Part B.

• If your employer has 20 or more employees: You may be able to delay enrolling in Part B and stick with your current health plan. Or you can combine both, using Original Medicare as secondary coverage.
• If your employer has fewer than 20 employees: You’ll need to enroll in Part A and Part B when you turn 65. This is because Medicare becomes your primary insurer, and delaying could leave you without coverage or reduced benefits.
• If you’re covered through your spouse’s employer: Your choices depend on the rules of that health plan. Some allow you to delay Part B enrollment, while others require you to enroll at 65.

Part B late enrollment penalties are added to your monthly premium and charged each month for as long as you have coverage. These penalties increase until you sign up, so understanding your current coverage can help you make the right choice about when to enroll in Medicare. 

You may be able to delay enrollment without penalty into Part D if your current prescription drug coverage is considered creditable, meaning it pays about as much of your out-of-pocket prescription costs as Medicare. Employer and other types of group health plans are required to send a Notice of Creditable Coverage to all Medicare-eligible employees each September. 

After the group health plan coverage or employment ends – whichever happens first – you will enter a Special Enrollment Period to enroll into an Original Medicare Part B, Medicare Advantage, or Medicare Supplement plan. 

You may also qualify for a Medicare Special Enrollment Period if you move or are unable to enroll due to an exceptional situation, like being impacted by a natural disaster. 

If you miss your enrollment period, you will need to wait until the next Open Enrollment Period to enroll in a Medicare Advantage or Supplement plan. This could leave you without original Medicare if you aren’t covered by another plan. 

A health savings account (HSA) is a great way to save for medical expenses, but Medicare changes how you use them.

Once you enroll in Medicare, you can no longer contribute to your HSA. If you do, there could be tax penalties. If you’re not ready to stop contributing, you may consider delaying your Part B enrollment – but only if it’s an option based on your situation.

Once enrolled with Medicare, you can still use the money in your HSA for eligible expenses like:

• Medicare premiums
• copays and deductibles
• prescription drugs

These funds can help offset your health care costs, even if you’re no longer contributing.

Working past 65 opens the door to new opportunities – and important decisions about your health coverage. Whether you stick with employer insurance, transition to the many Medicare options, or combine the coverages, knowing your options helps you stay covered and confident.

Join one of our Medicare 101 webinars or connect with us to explore the best path for your situation. Let’s work together to make your Medicare decisions simple and stress-free.