If you or your spouse return to work after you’ve enrolled in Medicare and the employer is offering health insurance, you may be able to opt out of Part B to avoid having to pay premiums for both Medicare and your employer’s health insurance.
Potentially, you could save at least $2,000 in 2023 — or more depending on your income. You may be able to save more if you can cancel your Medicare Advantage plan, Part D prescription drug plan or other additional health-related insurance you purchased. But not everyone has this option — it typically depends on the size of your employer. And when you retire, you’ll need to reenroll in Part B within a certain time frame to avoid late enrollment penalties.
Should I drop Medicare if my new job has health insurance?
Before deciding whether or not to withdraw from Medicare Part B, first find out whether Medicare is primary or secondary to your employer coverage. That will determine whether dropping Part B could leave you with coverage gaps.
At a large employer. If you work for a company with 20 or more employees, the employer’s coverage is primary and Medicare is secondary. You can disenroll from Medicare Part B and use your employer’s coverage instead.
You generally can’t drop Medicare Part A unless you’re paying a premium for it. For people who’ve paid Medicare taxes for 40 quarters — 10 years of work that don’t have to be consecutive — Part A has no premiums.
But to avoid a permanent Part B late enrollment penalty, when you leave, lose or retire from your new job, you must then reenroll in Medicare Part B while you’re still on the job or during a special enrollment period that lasts for eight months after your job-based private health insurance stops.
At a small business. The coverage rules are different for smaller companies. For most places with fewer than 20 employees, Medicare becomes your primary coverage at age 65 and the employer plan provides secondary coverage.
This means Medicare settles your medical bills first, and your private group plan pays only for services it covers that Medicare doesn’t. If you drop Part B in this situation, you will be left with big coverage gaps.
If you work for a small employer, ask whether you’re required to keep Medicare coverage if you’re 65 or older. That’s the most common arrangement. If not, ask your employer to provide the decision in writing.