Q. I’m nearly 65 and retired but have excellent health care coverage under my wife’s employer plan. We hope to use this until she retires in 10 years. But if I don’t enroll in Medicare now, will I be penalized when I sign up after her retirement?
A. No, as long as you follow Medicare’s rules. Almost anybody who is retired but has group health coverage from the employer of a spouse who is still working does not need to sign up for Medicare Part B on reaching 65. When your spouse retires — or gets laid off or otherwise stops working for this employer — you will then be entitled to a special enrollment period to sign up.
This period lasts for up to eight months after employer coverage comes to an end. As long as you enroll in Part B (which covers doctor visits and other outpatient services) during this time frame, you won’t incur a late penalty.
In addition, during the six months following Part B enrollment, you have a guaranteed right to buy a Medigap policy, also known as Medicare Supplement Insurance. After six months, Medigap providers can deny to sell you a plan, or can alter your premiums, based on preexisting conditions.
Under various laws, employers with 20 or more workers must offer exactly the same health benefits to employees and their spouses over age 65 as are offered to younger workers and spouses. These employers cannot require you to enroll in Medicare Part B or offer you any inducements to do so — such as paying the premiums of a Medicare Advantage plan or a Medigap policy.
You can enroll in Part A (hospital insurance) during your seven-month initial enrollment period around your 65th birthday. It won’t cost you anything — there are no premiums for Part A if you’re entitled to Medicare — but it provides an opportunity to tell the Social Security Administration (SSA), which handles Medicare enrollment, that you’re delaying Part B because you have health coverage under your spouse’s employer plan.
However, there are some exceptions to these general rules that you need to pay attention to:
- Check whether your spouse’s employer plan requires you, as a covered dependent, to enroll in Medicare when you turn 65. Some plans — notably the military’s TriCare-for-Life coverage and health benefits provided by an employer with fewer than 20 employees — automatically become secondary to Medicare when an enrollee becomes entitled to Medicare. That means Medicare pays claims first. In this case, if you’re not enrolled in Medicare, you would receive almost no coverage from the employer plan.
- If you are not married but living in a domestic partnership and you are covered by your partner's health insurance at work, you should enroll in Part A and Part B during your initial enrollment period at age 65 to avoid late penalties. Medicare does not recognize domestic partners as spouses, and you are not entitled to a special enrollment period when your partner stops work.
Also, remember that the key phrase in the general rules is “a spouse who receives health insurance under current employment.” In other words, she or he is still working for the employer that provides the health coverage. So, even if your spouse receives terrific retiree health benefits after ceasing to work, both of you should consider signing up for Medicare (Parts A and B) at that time.
You’re not obligated to enroll, of course. But if you don’t, and some years down the line those retiree benefits come to an end for some reason, you would not then be entitled to a special enrollment period and would therefore be liable for permanent late penalties.
What if you sign up for Part B but later you or your spouse gets a job with health benefits? If this coverage meets all the conditions specified above, you can opt out of Part B at any time. You'll need to fill out a CMS-1763 form (pdf) and submit it to SSA. A personal interview with a Social Security representative is also required to disenroll; call 800-772-1213 or contact your local SSA office to arrange one.
And what about Medicare Part D, which provides prescription drug coverage? Here the rules are different. As long as you continue to receive “creditable” drug coverage under the employer plan — whether your spouse is still working or retired — you do not need to sign up for a Part D plan.
Creditable coverage means that Medicare considers it to be as good as Part D. The benefits administrator of the employer plan can tell you whether this is so. If you lose this coverage at some stage, you will then receive a special enrollment period of two months to sign up with a Part D plan without incurring a late penalty.
Patricia Barry is the author of Medicare for Dummies 3rd edition (Wiley/AARP, October 2017).