How to Decide if You Should Apply for Medicare while You are Still Working

While most Americans can’t wait to enroll in Medicare when they become eligible right around age 65, some wonder what they should do about Medicare if they keep working past the age of 65 or whether they need to apply for Medicare if they are still working? The right decision really comes down to individual circumstances. Many 65-year-old kupuna are still working and may have robust private health insurance that they don’t want to or aren’t sure about giving up. When it comes to Medicare, most seniors begin by making a decision about whether to enroll in the two parts of Original Medicare: Part A (hospital insurance) and Part B (medical insurance).

How to Decide if You Should Apply for Medicare While You are Still Working


Read through the following information to help make a decision about when to apply for Medicare if you are still working. There is no one size fits all answer; you may decide to enroll in Medicare Part A, Part B or both. Or, you may be in a position to delay enrolling in any part of Medicare until you are ready to retire.


Enrolling in Medicare Part A


If you or your spouse worked at least 10 years (40 quarters), have been an American citizen or permanent legal resident for at least five years, and paid Medicare taxes during that time, you qualify for premium-free Medicare Part A. You will be automatically enrolled at age 65, even if you are still working.


On the other hand, if you do not qualify for premium-free Medicare Part A, it may make sense to delay enrollment if you already have creditable* health insurance through your employer or other means. If you are not eligible for premium-free Part A, delaying enrollment without creditable health coverage can lead to a late-enrollment penalty later when you do enroll.


Note: once you are enrolled in Part A (or any part of Medicare), you will not be able to contribute to your health savings account (HSA). If you have an HSA and want to keep contributing to it, you will need to delay Part A. If you do decide to switch to Medicare, you will still be able to use the funds in your HSA for qualified medical expenses – including some Medicare costs.


*Creditable health insurance is any health insurance or other health benefit plan that meets a minimum set of qualifications.


Enrolling in Medicare Part B


Medicare Part B comes with a monthly premium, so seniors are not automatically enrolled and may choose to delay Part B enrollment. High-income seniors pay a higher premium while low-income, low-resource seniors may qualify for help with their Part B premium. Because it comes with a cost, it can make sense to delay enrolling in Part B if you or your spouse are still working and have employer-based group coverage. However, delaying Part B enrollment without creditable health coverage can lead to a late-enrollment penalty later when you do get around to enrolling.


Can I Sign up for Medicare While I am Still Working?


Seniors may wonder if you can be on Medicare while they are working full time? The answer is yes. Even if you have health insurance through your employer or union, it may still make sense to sign up for Medicare because the program can help cover some of the costs that are not paid for by your group health plan. In some cases, Medicare could end up being the primary payer while your group plan would become the secondary payer. Speak with your plan administrator to get the information you need to make a decision about signing up for Medicare before you retire. Ask the following questions:

  • Is my group health plan considered creditable health coverage? (If it is not, then you will be required to enroll in Medicare when you turn 65).

  • How does my group health plan compare to Medicare coverage?

  • How would my group health plan work with Medicare coverage?

  • Will my group health insurance change if I enroll in Medicare? If yes, then how?

  • How will my dependents be affected if I switch to or add Medicare coverage?

Some things to consider if you decide to delay signing up for Medicare:


Remember, if you don’t sign up for Medicare when you’re first eligible and don’t have other creditable coverage based on current employment, you could be stuck with a late-enrollment penalty later when you do enroll. The late-enrollment penalty applies to Medicare Part B (and Part A, if you have to pay a premium for it).


After your creditable group coverage ends or you stop working (whichever happens first), you will have access to an eight-month Special Enrollment Period to sign up for Medicare. Note: Your eight-month Special Enrollment Period begins right away, regardless of whether you decide to sign up for COBRA after you are no longer working. If you wait until after your Special Enrollment Period has ended then you will need to wait until the next General Enrollment Period (January 1 to March 31 every year) to enroll, at which time you may be assessed a late-enrollment penalty.


Seniors have many health care decisions to make when they turn 65, especially when they are still working and have creditable health coverage. It’s best to start asking questions at least a year before you turn 65 so you are prepared to make the best decisions for you and your family.

Contact a PBC Agent for Help


Our independent insurance agents are dedicated to assisting people on Medicare and those who are ready to transition from employer coverage to personal retirement coverage. We help kupuna understand their benefits options and apply for additional coverage, as needed. Because we represent all the major Medicare Advantage and supplement plans in Hawaii, we are able to offer unbiased advice; all at no cost to our clients.


At PBC, our clients are our number one priority and we look forward to getting to know you and your needs. Call us today at (808) 738-4500 to see how we may be of assistance.


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