Still Working at 65? Your Medicare Options in Hampton Roads

Still Working at 65? Your Medicare Options in Hampton Roads

More Hampton Roads residents are working past age 65 than ever before, whether by choice or necessity. If you're one of them, you face a unique Medicare situation that requires careful navigation between employer coverage and Medicare benefits.

After helping dozens of working seniors in Virginia Beach, Norfolk, and Chesapeake understand their Medicare options, I know this decision can feel complicated. The good news is that with the right information, you can make choices that protect your coverage, avoid penalties, and save money.

Let me explain your options and help you understand the best path forward for your specific situation.

Understanding Your Basic Options When You Turn 65 and Are Still Working

Option 1: Enroll in Medicare Parts A and B Immediately Option 2: Enroll in Medicare Part A Only and Delay Part B Option 3: Delay Both Medicare Parts A and B

The right choice depends on your employer coverage, company size, and personal circumstances.

When You Can Safely Delay Medicare Part B

You can delay Medicare Part B enrollment without penalties IF:

Your Employer Has 20 or More Employees: This is a federal requirement. Smaller employers don't qualify for penalty-free Medicare delays.

You Have Group Health Coverage: The coverage must be through current employment (yours or your spouse's), not COBRA or retiree coverage.

The Group Plan Is Primary: Your employer coverage must pay benefits before Medicare would pay.

You're Actively Working: The employment must be current and active, not just maintaining benefits after retirement.

Why Most Working Seniors Should Still Enroll in Medicare Part A

Medicare Part A (hospital insurance) is usually free if you've paid Medicare taxes during your working years. For most people, enrolling in Part A at 65 makes sense because:

No Cost: If you're not paying premiums, there's no financial downside.

Coordination Benefits: Part A can work with your employer coverage to reduce your out-of-pocket costs.

Automatic Enrollment: If you're receiving Social Security benefits, you'll be automatically enrolled in Part A anyway.

HSA Consideration: If you contribute to a Health Savings Account, enrolling in Medicare Part A ends your HSA contribution eligibility.

The Health Savings Account Dilemma

If you're contributing to an HSA through your employer, Medicare enrollment creates complications:

HSA Contribution Rules: You cannot contribute to an HSA once you enroll in any part of Medicare.

Retroactive Enrollment: Medicare Part A enrollment is retroactive to 6 months before you apply, which could create HSA tax issues.

Planning Strategy: If HSA contributions are valuable to you, consult with a tax professional about timing Medicare enrollment.

Prescription Drug Coverage Considerations

Even if you delay Medicare Part B, you must maintain creditable prescription drug coverage to avoid Part D penalties:

Employer Plan Coverage: Your employer plan must provide prescription drug coverage that's "as good as" Medicare Part D.

Creditable Coverage Certificate: Get written confirmation from your employer that your coverage is creditable.

Gap Prevention: If you lose employer coverage, you must enroll in Medicare Part D within 63 days to avoid penalties.

When Employer Coverage Plus Medicare Makes Sense

In some situations, having both employer coverage and Medicare provides better benefits:

Coordination of Benefits: Medicare and employer insurance can work together to reduce your total out-of-pocket costs.

Provider Access: Medicare might provide access to providers not covered by your employer plan.

Prescription Coverage: Combining plans might reduce your drug costs.

Future Planning: Having Medicare in place eliminates concerns about qualifying for Medicare Supplement insurance later.

Common Scenarios for Hampton Roads Workers

Scenario 1: Large Company with Good Benefits If you work for a large Hampton Roads employer (Sentara, Navy Federal, etc.) with comprehensive health benefits, you can likely delay Medicare Part B safely while maintaining excellent coverage.

Scenario 2: Small Business Employee If you work for a company with fewer than 20 employees, Medicare becomes primary at 65, and you should typically enroll in both Parts A and B.

Scenario 3: Spouse's Employer Coverage If you're covered through your spouse's large employer plan, you may be able to delay Medicare. However, verify that the plan covers spouses of Medicare-eligible employees.

Scenario 4: Consulting or Part-Time Work If you're working but don't have employer group coverage, you should enroll in Medicare at 65 to avoid penalties and coverage gaps.

What Happens When You Stop Working

When you retire or lose employer coverage, you get a Special Enrollment Period:

8-Month Window: You have 8 months from when your employer coverage ends to enroll in Medicare Part B without penalties.

Medicare Supplement Rights: You get a new 6-month guaranteed issue period for Medicare Supplement insurance starting when you enroll in Part B.

Immediate Action Required: Don't wait until the end of the 8-month period – enroll as soon as possible to avoid coverage gaps.

Mistakes Working Seniors Make

Assuming All Employer Coverage Qualifies: Not all employer plans meet the requirements for delaying Medicare without penalties.

Not Getting Written Confirmation: Always get documentation that your employer coverage is creditable for prescription drugs.

Missing Special Enrollment Deadlines: When you do retire, missing the 8-month enrollment window results in penalties and delayed coverage.

Not Planning for Medicare Supplement Insurance: If you wait years to enroll in Medicare Part B, you might face health underwriting for supplement coverage.

Financial Considerations

Employer Premium Contributions: Weigh the value of your employer's premium contributions against Medicare costs.

Out-of-Pocket Costs: Compare your current employer plan's deductibles and copays to what you'd pay with Medicare plus supplements.

HSA Contributions: Consider the tax benefits of continued HSA contributions versus Medicare enrollment.

Future Costs: Factor in what Medicare will cost when you do enroll, including potential rate increases.

Questions to Ask Your Employer

1. How many employees does our company have? (Must be 20+ for Medicare delay)

2. Is our prescription drug coverage creditable compared to Medicare Part D?

3. How does our plan coordinate with Medicare if I enroll?

4. What happens to my coverage when I retire?

5. Can you provide written confirmation of creditable coverage?

   
   

Special Considerations for Hampton Roads Federal Employees

Many Hampton Roads residents work for federal agencies or contractors:

Federal Employee Health Benefits (FEHB): These plans typically coordinate well with Medicare and provide creditable prescription drug coverage.

Military and Civilian Mix: Many local residents have both military and civilian federal employment, creating complex coordination situations.

Security Clearances: Some positions require continued employment for clearance maintenance, affecting retirement timing decisions.

How I Help Working Seniors Navigate Their Options

As your local Medicare broker, I provide guidance specific to working seniors:

Employer Plan Analysis: I help you understand how your specific employer coverage works with Medicare.

Timing Strategy: I help you plan the optimal timing for Medicare enrollment based on your work and retirement plans.

Coordination Planning: I explain how different Medicare options coordinate with your employer benefits.

Transition Planning: When you're ready to retire, I help ensure smooth transitions with no coverage gaps or penalties.

Making the Right Decision for Your Situation

The decision about Medicare while working isn't one-size-fits-all. It depends on your employer, your health needs, your financial situation, and your retirement plans.

The key is understanding your options, getting accurate information about your employer coverage, and planning ahead for your eventual transition to full Medicare coverage.

Call Retha Rish Insurance Agency at 757-692-8388 or email rrish@asb.insure to discuss your Medicare options while working.

Don't make Medicare decisions while working based on assumptions or incomplete information. Get personalized guidance that considers your specific employment situation and helps you make the best choice for both your current and future healthcare needs.