Group health insurance from a current employer
After turning 65, for as long as you receive group health insurance from an employer for which you or your spouse still actively works, you have the right to delay signing up for Medicare Part B (and avoid paying its premiums) — provided that your employer has 20 or more employees.
When that employment ends, you’re entitled to a special enrollment period of up to eight months to sign up for Part B without incurring any late penalties.
Most employers cannot require employees (or their spouses) who turn 65 to sign up for Medicare; they must offer these workers the same benefit options as younger employees (and their spouses). If you do sign up for Medicare as well (which is your choice), your employer plan is primary and Medicare serves as secondary insurance. The exception is if your employer has fewer than 20 workers (or fewer than 100 if you have Medicare through disability), in which case Medicare usually becomes primary.
The primary insurance pays your medical claims first and the secondary insurance pays for any services that it covers but the primary insurance doesn't. So if your health insurance comes from a small employer, it’s important to check whether or not you are required to sign up for Medicare. If you are but fail to enroll, you would be left with essentially no insurance at all.
Retiree health benefits
Medicare Parts A and B are always primary to retiree coverage provided by a former employer or union. In effect, your plan becomes supplemental insurance that improves on Medicare — maybe covering some services that Medicare doesn't, or paying some of Medicare's out-of-pocket costs.
Contact your retiree plan to find out exactly how it fits in with Medicare. If the plan provides "creditable" drug coverage — meaning that Medicare considers it at least as good as Part D coverage — you don't need Part D. Your retiree plan's administrators can tell you whether it's creditable or not.
Federal retiree health benefits
If you're covered by the Federal Employees Health Benefits Program (FEHBP), you are not required to join Medicare Part B when you retire. But if you later wanted to enroll — perhaps if your FEHBP plan became too expensive to keep up — you'd then get permanent late penalties.
If you keep your plan and join Medicare, then Medicare becomes primary, as explained above, and you can switch to a lower-cost federal health plan for secondary coverage if you want to. Also, Medicare covers some services that FEHBP does not — for example, home health care and some medical equipment and supplies. If your plan provides creditable drug coverage, you don't need Part D.
For more information on FEHBP benefits and Medicare, see the Office of Personnel Management's frequently asked questions.
Veterans health benefits
With coverage from the Department of Veterans Affairs (VA), you're not required to enroll in Part B, but the VA recommends it. Medicare expands coverage beyond VA hospitals and doctors, which could be important if you had to be taken to a non-VA facility in an emergency. You can use your VA card at VA facilities and your Medicare card elsewhere.
Also, delaying enrollment could result in a Part B late penalty if you lose VA benefits or want to enroll in Medicare in the future.
While in the VA program, you don't need Part D. If you lose drug coverage, you won't receive a late penalty if you enroll in a Part D drug plan within two months. However, Part D might be worth having if you qualify for the federal Extra Help program, which significantly reduces out-of-pocket costs for prescriptions. (See the VA's guidance for veterans eligible for Medicare.)
Military retiree health benefits
While still on active duty, you and your covered spouse continue to receive TriCare benefits, even if either of you is older than 65. But if you're retired, you're switched from TriCare to the TriCare for Life (TFL) program at age 65, and so is your covered spouse when he or she reaches 65. You must then enroll in Medicare Part A and Part B, which become primary, and TFL serves as supplemental insurance.
If you don't enroll, TFL cannot pay for any services that Medicare covers. This rule also applies if you're retired and you or your spouse becomes eligible for Medicare at an earlier age due to disability. In the TFL program, there is no premium to pay but you must pay the Medicare Part B premium. You don't need Part D. (For more information, see the military's guidance on TFL and Medicare.)
Coordination of benefits
Two or three months before you become eligible for Medicare, you should receive through the mail a letter telling you how to complete your “Medicare Initial Enrollment Questionnaire,” a form that asks you to specify any other coverage you may have. It’s important to fill this out because your benefits can then be coordinated automatically without your having to file paperwork for claims.
For more information on how Medicare works with other insurance (including liability insurance), see the government publication "Medicare and Other Health Benefits: Your Guide to Who Pays First." If you don’t receive the letter, or have questions, call Medicare’s Benefits Coordination & Recovery Center (BCRC) toll free at 1-855-798-2627 (TTY: 1-855-797-2627).
Patricia Barry is the author of Medicare for Dummies, 3rd edition (Wiley/AARP, October 2017).