When to Sign Up for Medicare: Timing & Common Mistakes

Important Questions to Ask

When Should You Sign Up for Medicare?

Most people become eligible for Medicare when they turn 65.

But turning 65 does not always mean you have to sign up for Medicare right away.

Some people can get Medicare before age 65 because of a disability.

Other people may be able to wait past age 65 because they are still working and have health insurance through an active employer.

The important thing is knowing when you need Medicare and when you can safely wait.

Most People Become Eligible at Age 65

Your first chance to sign up for Medicare is called your:

Initial Enrollment Period

It lasts for 7 months.

It includes:

3 months before the month you turn 65

The month you turn 65

3 months after the month you turn 65

For example, if your birthday is in June, your Initial Enrollment Period normally runs from:

March through September

If you are retiring at 65 and need Medicare to become your health insurance, you will usually want to enroll during this period.

You May Be Enrolled Automatically

Some people do not have to sign themselves up.

If you are already receiving Social Security benefits before age 65, you may be automatically enrolled in Medicare Parts A and B.

If you are not receiving Social Security yet, you may need to sign up yourself.

So do not assume Medicare will automatically start just because you turn 65.

Check before your 65th birthday.

Can You Get Medicare Before Age 65?

Yes.

Some people can receive Medicare because of a disability.

A person receiving Social Security disability benefits will generally become eligible for Medicare after receiving disability benefits for 24 months.

There are different rules for certain people with:

ALS, also called Lou Gehrig’s disease

or

End-Stage Renal Disease, also called ESRD.

So Medicare is not only for people age 65 and older.

Some people can qualify much earlier.

What If You Are Still Working at 65?

This is where Medicare can become confusing.

You may turn 65 and think:

“I have to sign up for Medicare now or I’m going to get a penalty.”

That is not always true.

If you or your spouse is still actively working and you have qualifying employer group health insurance through that current job, you may be able to wait to enroll in Medicare Part B.

The important words are:

ACTIVE EMPLOYMENT

The insurance generally needs to come from your or your spouse’s current job for the normal Special Enrollment Period rules to apply.

Always check with the employer’s benefits department before delaying Medicare.

Why Would Someone Delay Part B?

Medicare Part B has a monthly premium.

If you are 65, still working, and have good health insurance through your employer, you may not need Part B yet.

If your employer coverage allows you to safely delay Part B, you may decide:

“I’ll keep my employer insurance while I’m working and enroll in Part B when I retire.”

If you follow the rules, you can later use a Special Enrollment Period to enroll in Part B without the normal late-enrollment penalty.

But never assume your employer coverage allows you to delay Medicare.

Ask your employer first.

The size of the employer and the type of coverage can matter.

What About Medicare Part A?

This is where there is a common misunderstanding.

You may hear someone say:

“You have to sign up for Part A when you turn 65. It’s free anyway, and you’ll get a penalty if you don’t.”

For most people, that is not correct.

Most people qualify for what is called:

Premium-Free Part A

That normally means you or your spouse worked long enough and paid Medicare taxes.

If you qualify for premium-free Part A, you can generally sign up at age 65 or wait and sign up later.

You do not get a Part A late-enrollment penalty simply because you waited past age 65 to take premium-free Part A.

The Part A late-enrollment penalty is mainly an issue for people who do not qualify for premium-free Part A and have to purchase Part A.

That is a very important difference.

So why do so many people take Part A at 65?

Because for most people:

Part A costs $0 per month.

If there is no premium, people often think:

“Why wouldn’t I take it?”

For many people, that may be fine.

But there is one important group of people who may have a very good reason to wait.

If You Have an HSA, Be Careful With Part A

An HSA, or Health Savings Account, changes the conversation.

Let’s say you are 65.

You are still working.

You have qualifying employer health insurance.

Your employer health plan allows you to keep putting money into an HSA.

You might think:

“I’ll take free Medicare Part A now and keep my employer insurance.”

But there is a problem.

Once you are enrolled in Medicare, you can no longer make new contributions to an HSA without possible tax problems.

That includes Medicare Part A.

So even though Part A may cost you $0 per month, taking it could stop you from being allowed to continue contributing to your HSA.

In that situation, waiting to enroll in Part A can make sense.

Waiting on Premium-Free Part A Does Not Create a Penalty

This is the part many people misunderstand.

If you qualify for premium-free Part A, you do not need to enroll at exactly age 65 just because you are afraid of a Part A late penalty.

You can generally wait.

For someone who is still working with qualifying employer insurance and wants to keep contributing to an HSA, that can be very important.

They may choose to delay:

Part A

and

Part B

until they are getting ready to retire.

Then they can enroll when they need Medicare.

Watch Out for the 6-Month Rule

There is one more HSA rule you need to know.

If you are over 65 and later apply for premium-free Medicare Part A, Medicare can make your Part A coverage go backward for up to 6 months.

It cannot go back before the month you first became eligible for Medicare.

This means you have to plan ahead.

For example:

You are 68.

You are still working.

You have employer insurance and are contributing to an HSA.

You decide you will retire in July and apply for Medicare.

Your premium-free Part A may go back as far as 6 months.

That is why Medicare and Social Security warn people in this situation to generally stop HSA contributions at least 6 months before applying for Medicare or Social Security benefits.

Otherwise, you could accidentally make HSA contributions for months when Medicare later says you already had Part A.

That could create a tax problem.

What Happens When You Retire?

Let’s say you turn 65 but keep working.

You have qualifying health insurance from your current employer.

You properly delay Medicare Part B.

Then you retire at age 68.

You are not too late for Medicare.

You can use what is called a:

Special Enrollment Period

You can generally enroll in Part B while you still have qualifying active-employer coverage or during the 8 months after the employment or coverage ends, whichever happens first.

Because you had qualifying coverage from active employment, you can generally enroll without the normal Part B late-enrollment penalty.

Don’t Wait 8 Months Just Because You Can

Having an 8-month Special Enrollment Period does not mean you should wait eight months to sign up.

You do not want a gap in your health insurance.

For example:

Employer insurance ends June 30.

You want:

Medicare to begin July 1.

You should work on your Medicare enrollment before your employer insurance ends.

The goal is a smooth move from:

Employer Insurance → Medicare

How Do You Sign Up After Working Past 65?

When you are ready to leave your employer coverage, you can apply for Medicare through Social Security.

If you delayed Part B because you had qualifying employer coverage, Social Security may need information showing that you had health insurance through active employment.

Think of it this way:

“I didn’t forget to enroll in Medicare. I was allowed to wait because I had qualifying insurance through my or my spouse’s current job.”

That is very different from simply forgetting to enroll.

Be Careful With COBRA and Retiree Insurance

This is another common mistake.

COBRA is not the same as insurance from active employment.

Neither is retiree insurance.

You may still have an insurance card.

But that does not automatically mean you can safely delay Medicare.

Your Medicare Special Enrollment Period is generally tied to active employment and the health coverage connected to that employment.

So don’t simply ask:

“Do I have insurance?”

Ask:

“Is this insurance based on my or my spouse’s current active employment?”

That difference can be very important.

An Easy Example

Let’s say Susan turns 65.

Susan is still working.

Her employer provides qualifying group health insurance.

Susan also contributes money to an HSA.

Susan talks with her employer and learns that she can safely delay Medicare while she continues working.

Susan decides not to enroll in Part A or Part B yet.

She does not have to take premium-free Part A just because she turned 65.

By waiting, she can continue making HSA contributions while she remains eligible to do so.

At age 68, Susan decides to retire.

She plans ahead.

Because premium-free Part A can go back as far as six months, Susan stops making HSA contributions early enough to avoid problems.

She then enrolls in Medicare.

Because she had qualifying employer coverage from active employment, she can use her Special Enrollment Period for Part B.

Susan moves from:

Employer Insurance → Medicare

without having to take Medicare simply because she turned 65.

Parts A and B are only the start. When you enroll, you’ll also decide whether to add Part D prescription coverage and a Medicare Supplement, or choose Medicare Advantage instead. Those choices have their own enrollment windows, too.

The Easy Way to Remember It

Turning 65 and Retiring?

You will usually want to enroll in Medicare during your Initial Enrollment Period.

Already Getting Social Security?

You may be automatically enrolled. Check your Medicare information.

Under 65 With a Disability?

You may qualify for Medicare early.

Turning 65 and Still Working?

If you or your spouse has qualifying insurance through current active employment, you may be able to delay Medicare.

Check with the employer before making that decision.

Have an HSA?

Do not automatically enroll in Part A just because someone tells you:

“It’s free, so you might as well take it.”

If you want to continue contributing to an HSA, enrolling in Medicare Part A can create a problem.

And remember:

Most people who qualify for premium-free Part A do not receive a late-enrollment penalty just because they wait past age 65 to enroll.

Plan ahead because Part A can be retroactive for up to six months when you enroll after age 65.

Retiring After Age 65?

Use your Special Enrollment Period to move from qualifying active-employer coverage to Medicare.

Start the process before your employer coverage ends so you don’t have a gap.

The Most Important Question

When someone approaches age 65, don’t simply ask:

“Am I turning 65?”

And don’t simply ask:

“Do I have health insurance?”

Ask:

“Am I retiring, or am I still actively working?”

“Where does my health insurance come from?”

“Does my employer coverage allow me to delay Medicare?”

“Am I contributing to an HSA?”

Those answers help determine when you should enroll.

The biggest thing to remember is:

Turning 65 makes you eligible for Medicare. It does not always mean you must enroll in every part of Medicare immediately.

If you are retiring and need Medicare, enroll on time.

If you have qualifying insurance through active employment, you may be able to wait.

And if you have an HSA, there may be a very good reason to delay even premium-free Part A until you are ready to stop making HSA contributions.