What Are the Medicare Rules Concerning Insurance Coverage While Working?

Medicare provides medical and hospitalization insurance to individuals who are age 65, whether employed or retired. You can enroll for Medicare benefits three months before the month you reach 65, the month you reach 65 or three months after reaching 65. If you have sufficient credits of employment, Part A or hospitalization insurance is free. You may have insurance coverage at your employment, but Social Security recommends that you apply for Medicare coverage as well.

Once you reach age 65, you may enroll in Medicare Part A and Part B even if you have group insurance coverage at work. You can receive Part A free if you have 10 years of employment in a position in which you paid Federal Insurance Contributions Act taxes. Part B is medical insurance for doctor’s visits and outpatient care, and the cost in 2011 is about $115 a month.

If you have health insurance at work, you may decide you do not need Medicare. If your health insurance results from your employment, you may not incur a penalty by not taking Medicare. Check to be certain you will not incur a penalty if you choose to delay taking Medicare benefits. Medicare recommends that you contact your union or work benefits administrator to inquire about how the group insurance interacts with Medicare. You may choose to take Part A only. Determine if Part B is beneficial to you. You have eight months to enroll in Part B after your employment ends.

If you have both Medicare and group health insurance, one medical insurer pays first, or is the primary coverage, while the other insurer pays secondary coverage. This is called coordination of benefits. Insurers who are primary are no-fault insurance like automobile coverage, liability insurance, worker’s compensation and black lung benefits. Individuals who are disabled and under 65 covered by group insurance with a spouse’s employer with more than 100 employees, the group insurance pays before Medicare. Working individuals over 65 with group insurance in a group larger than 20 have primary coverage with the group insurance. Medicaid and TRICARE are secondary coverage to Medicare.

If you quit work or retire, you may qualify for COBRA or continued health insurance coverage through your employer. This insurance will not extend your Medicare enrollment rules, as the only coverage that applies for this purpose is coverage provided for your current employment. You will incur penalties when you register for Medicare benefits under these conditions. You may also find that you are without health insurance while you wait for open enrollment.