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When to Delay Medicare Part B

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What are the conditions for being able to delay Medicare Part B and how you can use the special enrollment period to eventually sign up for Part B? (You should also consider whether you need to delay Part A.)

More and more people are working beyond age 65. Yet many consumer publications and online advice columns on Medicare tend to ignore or downplay this fact.

So the questions most frequently asked are “What do I do about Medicare if I continue to work beyond 65?”, “I still have health insurance from my spouse’s job, so do I need Medicare?”, and “I work and pay for my employer’s health benefits, but won’t I be penalized if I don’t sign up for Medicare now that I’m 65?”

In a nutshell: For as long as you’re covered beyond age 65 by group health insurance provided by an employer for whom you or your spouse still actively works — and that employer has 20 or more employees — you can delay Part B enrollment until this employment or the health coverage ends (whichever comes first).

At that point, you’re entitled to a special enrollment period to sign up for Part B immediately and without penalty. (That’s the rule for people 65 and older. If you have Medicare due to disability, it’s a little different.)

Even if you can delay Part B in favor of employer insurance, note that you’re free to choose whether you want to continue with the employer insurance and postpone Medicare, whether you want to drop the employer benefits and rely totally on Medicare, or whether you want to have both. It’s entirely up to you.

Another super-important point: If you continue working beyond age 65 for an employer with 20 or more workers, the law requires the employer to offer you exactly the same health benefits that are offered to younger workers in the same company or organization. This law also gives the same protection to spouses aged 65 or older who are covered by the employer plan.

One other situation also requires a special explanation. If you retire or otherwise stop work before your IEP ends, you aren’t entitled to a SEP but must enroll in Medicare during your IEP to avoid late penalties. (Under Social Security rules, an IEP always trumps a SEP if they overlap.)

For example, say you turn 65 in April, so that your IEP runs from January 1 to July 31. But you plan to retire at the end of June, so you need to sign up before May 31 to ensure that Medicare coverage begins on July 1; if you enroll in the fifth, sixth, or seventh month of your IEP, coverage is delayed for at least two months.

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