Should you enroll in Medicare Part A if you’re still working? The short answer is (usually) yes! However, everyone’s situation is unique, and you’ll need to consider a few things before making your decision. While many people enroll in Medicare as soon as they become eligible, there are situations where delaying your enrollment may be a better option. One such situation is when an individual is still working and has health insurance coverage through their employer.
In this article, we’ll explore whether you should sign up for Medicare Part A if you are still working and provide guidance on making an informed decision based on your unique circumstances. We’ll examine situations in which you should or should not enroll in Part A and the factors you should consider before making a decision. By the end of this article, you’ll have a better understanding of whether enrolling in Medicare Part A while still working is the right choice for you.
Medicare Part A offers inpatient hospital insurance. Consider it your “room and board” coverage for any hospital stay. This also applies to skilled nursing facilities, hospice care, and some home health care.
In nearly all cases, we recommend our clients enroll in Part A, even if they’re still working. This recommendation is because for most people, Part A is premium-free. You won’t pay a premium for Part A if you or your spouse have worked and paid Medicare taxes for ten years (or 40 quarters).
If you do have coverage through an employer’s group plan, you’ll have the added benefit of a secondary insurance if you also enroll in Medicare Part A. Employers who have at least 20 employees all have creditable coverage. “Creditable” means that it offers at least as much coverage as Original Medicare (Parts A and B). In this case, Medicare will become the secondary payor.
You’ll also need to enroll in Medicare Part A – and other parts of Medicare – if you have an employer-sponsored health insurance plan, but it is not creditable. If you do not have creditable coverage past age 65, you’ll pay Medicare penalties. Parts A, B, and D all have financial penalties associated with them. The penalty amounts add up quickly, and you pay some of them every month for the rest of your life. In addition, when an employer has non-creditable coverage, Medicare becomes the primary payor. Failing to enroll in Part A will cause your coordination of benefits to operate improperly. Since you won’t have primary coverage, your secondary coverage (the employer’s plan) won’t function.
If you don’t have creditable coverage, you’ll need to enroll in Parts A and B. You should also consider adding either a Medicare Advantage plan or a Medicare Supplement plan in Texas. Depending on which route you go, you’ll also need to select a Part D plan.
There are only two situations in which we would advise someone not to enroll in Part A if they are still working and have creditable coverage.
The first reason is if you have an HSA (Health Savings Account) that you wish to continue contributions into. An HSA is an account anyone on a high-deductible health plan (HDHP) can open. Some employers help fund an HSA, while others do not. Once you are enrolled in any part of Medicare, even if it’s just Part A, you are not allowed to contribute to an HSA. Doing so will cause you to pay tax penalties at the end of the year. So, if you want to continue contributing to enjoy the tax savings, you should not enroll in Part A. Of course, you are allowed to spend the HSA funds once you’re enrolled in Medicare.
The other reason we may not recommend you enroll in Part A is if you have not yet met the quarterly requirements to get premium-free Part A. Let’s take a look at what you must pay for Part A in 2023 if you haven’t met the requirements.
- At least 30 quarters: $278/month
- Less than 30 quarters: $506/month
If you are still working, the quarters you work will apply to the requirements. You may be able to work long enough to enjoy premium-free Part A, or at least pay the lesser of those two amounts.
Deciding whether to enroll in Medicare while still working requires careful consideration of your individual circumstances. Here are some factors you should take into account.
Personal health considerations. Think about your current health status, your potential future healthcare needs, and your plans for retirement. Consider how much coverage you need and whether your employer’s health insurance plan is sufficient. If you have a chronic health condition, for example, enrolling in Medicare may provide you with better help and peace of mind.
Coverage differences. Take time to fully understand your employer’s plan and how it compares to what Medicare has to offer. You’ll need to do a little research on Medicare Supplements and Medicare Advantage plans in Texas to decide if moving to Medicare offers more coverage.
Financial impact. Consider the cost of Medicare coverage compared to your group plan. Does your current health insurance plan have high deductibles and copays? Does your employer pay for some or all of your premiums? Would it be cheaper to move to Medicare? In some cases, especially at smaller companies, Medicare can save you money.
Overall, it’s usually a good idea to enroll in Medicare Part A, even if you are still working. It will give you additional coverage and benefits without adding a penny to your premiums. If you have questions about your specific situation, call the advisors at Cover Mile today.