En español | Full answer: Whether you need to enroll in Medicare at 65 if you continue to work and have health insurance through your job depends on how large the employer is. The same rules apply if your health insurance comes from your spouse’s job, regardless of whether you’re in an opposite-sex or same-sex marriage.
If the employer has 20 or more employees
For as long as you have health insurance from an employer for which you or your spouse actively works after you turn 65, you have the right to delay enrolling in Medicare until the employment or the coverage stops (whichever happens first). At that point, you’re entitled to a special enrollment period of up to eight months to sign up for Medicare without incurring any late penalties.
Note that active employment (your own or your spouse’s) is the key phrase here. You can’t delay Medicare enrollment without penalty if your employer-sponsored coverage comes from retiree benefits or COBRA — which by definition do not count as active employment. Nor does it count if you work beyond 65 but rely on retiree benefits from a former employer. You (or your spouse) must be actively working for the employer that currently provides your health insurance in order to delay Medicare enrollment and qualify for a special enrollment period later on.
The law requires a large employer — one with at least 20 employees — to offer you (and your spouse) the same benefits that it offers to younger employees (and their spouses). It is entirely your choice (not the employer’s) whether to:
(a) accept the employer health plan and delay Medicare enrollment; or
(b) decline the employer coverage and rely wholly on Medicare; or
(c) have both the employer coverage and Medicare’s at the same time.
However, if you enroll in both the employer plan and Medicare Part B, be aware of the consequences. In that situation, the employer plan is always primary — meaning that it settles medical bills first and Medicare only pays for services that it covers but the employer plan doesn’t. So, unless the employer coverage is very poor, you’d be paying monthly premiums for Medicare with little or no return.
Also, by signing up for Part B while you still have current employer coverage, you could be forfeiting your right to buy Medicare supplemental insurance (known as Medigap) with full federal protections after this employment ends. Those protections prohibit insurance companies from refusing to sell you a Medigap policy or charge higher premiums based on your health or preexisting medical conditions — providing that you buy a policy within six months of enrolling in Part B. (Outside of that six-month window, except in very limited circumstances, they can do both.)
If the employer has fewer than 20 employees
The laws that prohibit large insurers from requiring (or even persuading) Medicare-eligible employees to drop the employer plan and sign up for Medicare do not apply to companies and organizations that employ fewer than 20 people. In this situation, the employer decides.
If the employer does require you to enroll in Medicare, then Medicare automatically becomes primary and the employer plan provides secondary coverage. In other words, Medicare settles your medical bills first, and the employer plan only covers services that it covers but Medicare doesn’t. Therefore, if you fail to sign up for Medicare when required, you will essentially be left with no coverage.
It’s therefore extremely important to ask the employer whether you are required to sign up for Medicare when you turn 65 or receive Medicare on the basis of disability. If so, find out exactly how the employer plan will fit in with Medicare. If not, ask for that decision in writing.
Note that in this situation, signing up for Medicare Part B when you also have employer insurance will not jeopardize your chances of buying Medigap supplemental insurance after the employment ends. When Medicare is primary to the employer plan, you have the right to buy Medigap with full federal protections if you do so within 63 days of the employer coverage ending.
For more information, see the AARP article “Medicare When Working Beyond 65” at http://www.aarp.org/health/medicare-insurance/info-03-2011/ask-ms-medicare-question-94.html.