If you plan to work over age 65 in a small business that provides you and / or your spouse with group health insurance, it’s important to know how this will affect your Medicare coverage.
The number of employees working for your business will determine when you need to register for Medicare and which parties you must register for. For example, if you work for a large employer or own a large business, you have different options than someone working for a small business.
Medicare beneficiaries who work for a major employer have the option to defer their Medicare enrollment collectively until retirement. Small business owners and employees don’t have that luxury, however.
What is a small employer?
From a Medicare perspective, when a business has fewer than 20 employees, the business is considered a small employer or a small business. When you are actively working at age 65 for a small business, you have several options for your Medicare coverage.
Your first option is to enroll in Medicare and manage your group health plan through your business. The next option is to leave your group’s health plan and only enroll in the initial Medicare program (Part A and Part B). If you choose this option, you also have the option of adding a Medicare Supplemental Plan or a Medicare Advantage Plan.
Medicare will still be your primary coverage when you’re actively working for a small employer, so you’ll need to enroll in Medicare Parts A and B when you turn 65. You can then choose between keeping your group’s coverage as secondary coverage or purchasing additional private coverage, whichever is more cost effective.
When Medicare is primary, Original Medicare pays its share of your health bill first. The balance is then sent to your secondary insurer to pay its share. If your secondary insurance is covered by your employer, you may have costs associated with the plan deduction. If your secondary coverage is Medigap Comprehensive, you can pay next to nothing after Medicare and your Medigap pay their share.
Why you need Medicare when working for a small employer
Since Medicare will be your primary insurance, it is imperative that you have both parts of Original Medicare. If you don’t sign up for Part B, you could be addicted to 80% of your outpatient fees. This is how much Medicare would pay if you enroll when you should.
Since Medicare becomes your primary insurance when you work for a small employer, you will also be fined for not signing up during your Initial Enrollment Period (IEP) for Medicare. Your IEP begins three months before your 65th month. e birthday, lasts for your birthday and ends three months after your 65th e the month of birth. Typically your initial registration period is 7 months.
The penalty you earn for not enrolling in Medicare Part B during your IEP is 10% of the national average premium for each year you don’t get Part B. For example, if you wait to get Medicare Part B until you leave When you retire at age 70, a 50% penalty will be added to your monthly Part B premium.
The worst thing about Medicare penalties is that this is the last time you signed up for Medicare. So you can pay this fine for the rest of your life.
Timely registration at the time of the IEP avoids both unnecessary medical costs and unnecessary late fees.
Medicare Part D for Small Business Workers
Medicare has a voluntary prescription drug program called Part D. Although it is voluntary, you will pay a late enrollment penalty outside of your IEP if you don’t have other credible drug coverage. Most likely, your small employer health plan includes drug coverage, and if it does, there’s a good chance it’s credible coverage, or in other words, drug coverage. equal to or greater than coverage. Medicare Part D. Drugs,
If you choose to keep your group health plan as secondary coverage, be sure to check with your insurance company or group health insurance agent to confirm that the coverage is solvent for the DD part. until you retire.
Before you decide to delay enrollment in Medicare Part D, you should compare your drug coverage in your health plan with a Medicare covered group. Medicare Part D may be more profitable for you than your group’s plan for your health care costs.
Conclusion
If you plan to work over 65 for a small business with fewer than 20 employees, you must enroll in Medicare when you first become eligible. If you do not enroll in Medicare during the initial enrollment period, you will be fined for the entire subsequent period of Medicare Part B coverage.
That’s why it’s important to know all the facts about how Medicare works in relation to your company’s group health plan. If you assume Medicare has the same rules for all types of businesses and employers, you could be making a costly mistake.
