Some People Do And Some People Don’t.
If You Are Collecting Social Security-
If you started collecting Social Security prior to turning 65 then you will be automatically enrolled and your Medicare will become active on the first day of the month of your birthday. If your birthday happens to be on the 1st then your Medicare will start on the 1st of the month before the month of your birthday(i.e. Your birthday is April 1 your Medicare will begin March 1).
If You Are Still Working-
If you are still employed and have insurance coverage supplied by your employer and your employer has under 20 employees, then Medicare will become your Primary Payer and your employer coverage will be Secondary and you will have to sign up for Medicare. However, if your employer has over 20 employees then enrollment in Medicare is not necessary.
Medicare Monthly Costs-
Hospital Part A-
Medicare Part A is Free for most individuals that have worked and paid in through payroll for over 40 Quarters(10 Years). Those individuals that have worked and paid in for 39 Quarters or less will pay a Part A premium of $278.00 to $505.00 per month.
Medical Part B-
Medicare Part B comes with a minimum premium of $174.70(Income tested, some individuals will pay more-see IRMAA) which will automatically be deducted from your Social Security if collecting. If not collecting you will receive a bill for 3 months of premium(Monthly checking account deductions can be set up through Medicare.gov). Prior to this happening it’s a good idea to complete a comparison between your existing employer coverage and Medicare. If the employer has over 20 employees and coverage better serves you then you could delay signing up for Medicare Part B and having Part A only until retirement or when the employer insurance is no longer the better option. When that time comes the individual will complete a Medicare Part B Application(CMS-40B) and Employer Verification Form(CMS-L564/R297). This serves as proof that you had creditable coverage to avoid a Part B Late Enrollment Penalty.
Health Savings Account(HSA)-
Some individuals have a Health Savings Account(H.S.A.) through their employer. HSA’s allow you to set aside pre tax funds (and some employers even set funds aside for you) to be used for Medical expenses. Once your Medicare is active you will no longer have the pre tax option and could have a tax penalty if funds continue to be deposited in the H.S.A account. Medicare recommends the HSA funding cease at least 6 months prior to your Medicare becoming active to avoid tax penalties.
When to Sign Up-
If you have not started collecting Social Security prior to becoming Medicare eligible then you will have to sign yourself up. You will have a 7 month window( 3 months prior to your birthday month, your birthday month and the 3 months following the month of your birthday month) to complete your enrollment to avoid penalties. This is called your Initial Enrollment Period. If you enroll during the 3 months prior to your birthday month, then your Medicare will be effective on the 1st of your birthday month. If you enroll after that beginning with your birthday month your enrollment will begin on the 1st of the next month.
How To Sign Up-
Enrollment can be completed online through the Social Security website. You will be required to set up a mysocialsecurity account at ssa.gov if you don’t have one. If you are not comfortable doing it online a trip down to the local Social Security office will be the way to go.
