Medicare Transition, Once Retire

[2020 ButClassic]

I am turning 65 and plan to retire in a couple of months in May. I understand that I don't need to sign up for Medicare since I am under my company's plan. And once retired, I have 8 months to sign up for Medicare. Is my understanding correct?

Some people tell me that I only have 2 months to sign up for Medicare to avoid penalty or that I must at least sign up for Part A.

I don't think the two-month limit applies to me given my age and work/ insurance status but any guidance is appreciated.

[Marq1]

As long as you have coverage you don't have to sign up for Medicare.

Eventually when the time comes you will get form L564 from former employer that you will provide to Medicare.

[Vinny_in_NJ]

As long as you're working in a company with 20 or more employees your coverage is considered a qualified plan and no need for Medicare. But once you leave to retire it no longer is valid.

I would not wait for the retirement date to start applying for Medicare. Be aware that it takes time to get Medicare to start and if you get sick you will be totally responsible for the bills.

If you do work past 65, it is relatively easy to get on. And you do have time before you need to send forms in. Here's the info from Medicare: https://www.medicare.gov/basics/get-sta ... rage-start

[dwickenh]

Part A is free and most companies request a 65 year old to sign up for part A. You can hold off on part B until you leave your company private insurance plan.

"If your employer coverage is ending, check when your current coverage ends and sign up for Medicare about a month earlier. Signing up for Medicare before your current coverage ends can help you avoid a gap in coverage." from Medicare website. You have an 8 month special enrollment period, but you will need coverage once company plan ends.

[livesoft]

My spouse thought like the OP and continued to work past age 65 and did not sign up for Medicare. That's was a mistake that took quite a while to sort out.

Do yourself a favor and go to the source of good information: https://www.medicare.gov/basics/get-sta ... ng-past-65

Eventually when the time comes you will get form L564 from former employer that you will provide to Medicare.

You better make sure your employer knows about this form and has dealt with it before.

[Sampan]

I did not retire until 68 but signed up for Medicare A when I turned 65. Only later when faced with various employer offered health insurance plans did I learn that when you are on Medicare A, you can no longer fund any HSA. I don't know if I'd have done it but I wished I had known.

I gave notice that I would retire at the end of December. I signed up for Medicare Part B in early November. I had to get the L564 forms signed up with both employers I'd had after turning 65 to prove I'd had health insurance continuously.

[ModifiedDuration]

If you sign-up for Medicare after age 65 they will backdate your Part A coverage by 6 months (or to your 65th birthday month).

Since you cannot have Medicare coverage and contribute to an HSA at the same time, remember to stop contributing to your HSA the month before you turn 65 or 6 months before you apply for any part of Medicare.

[WillRetire]

Sign up for Part A to begin on the 1st of the month in which you turn 65, regardless of whether you are retired.

Sign up for Part B to begin immediately upon retiring, unless you are certain your employer will still cover you with health insurance. Some companies don't offer health insurance to retirees who are age 65 or older since those retirees are eligible for medicare.

[TheNightsToCome]

Sign up for Part A to begin on the 1st of the month in which you turn 65, regardless of whether you are retired.

If you do this, then you cannot contribute to an HSA, so I did not sign up for Part A at 65.

[ResearchMed]

Sign up for Part A to begin on the 1st of the month in which you turn 65, regardless of whether you are retired.

Sign up for Part B to begin immediately upon retiring, unless you are certain your employer will still cover you with health insurance. Some companies don't offer health insurance to retirees who are age 65 or older since those retirees are eligible for medicare.

The instructions about signing up for Part A immediately upon turning 65 even if still employed and fully covered under the Employer Healthcare Plan is interesting.
We were good little campers and did this several years ago (late retirement). Then I landed in hospital a few times, and we could never see where Medicare A helped out with the costs. So as we later started our transition to include Medicare/Retiree supplement, I spoke at length with HR/Benefits. After all, we needed to get documentation about the several years of "creditable coverage" since age 65.

>> Our employer SELF-INSURES, which could make a difference here:
HR/Benefits told us that NO, they did NOT get repaid for any of the hospital costs, that they "got nothing" when we signed up for Medicare A. So... what's the reason to sign up for Part A? In our case, we did not have a high deductible plan, so it didn't matter, but it could have to others.

Quite a few employers, perhaps especially the larger ones (or the ones with older employment contracts?) do offer "retiree healhcare coverage". However, it only starts to involve Medicare when the employee has reached age 65, but not if they retire earlier. Then it is a different type of plan.

We'd suggest contacting HR as soon as you know an actual/likely retirement date, or at least if it's within say, 3 months (not "next year...").
They "see this all the time", and they were a great help with the process.
Indeed, they told us NOT to wait, given we made the decision with only about 30 days to go. They said as long as everything got filed on time, we'd be covered, but IF we needed care before we had the proper documentation (cards, etc.?), there might be some snafus.

Everything arrived VERY quickly, and we were all set within about 2-3 weeks.
That was a real surprise.

And since then, we notified our providers, and the billing has been completely seamless, with just different forms and labels, etc.
All of our providers take Medicare.
One of them said, "Oh, that will be SO much easier! We won't have to deal with all those pre-approvals!".


RM

[2020 ButClassic]

Thank you for the replies!

I don't have HSA. To summarize, I had the steps below in mind.

-Turn 65 in March
-Retire in May
-Use COBRA for the remainder of 2025 (based on understanding that I don't have to sign up for Medicare for 8 months and that COBRA is an option)
-Get on Medicare in 2026

My spouse, a few years younger, to continue on COBRA

Here are some considerations:

-I am in maximum IRMAA bracket so Medicare will not offer savings vs. COBRA. I have also contributed to deductibles which will be wiped away.
-I'd like to just retire and decompress for a while and not deal with insurance for a while.

Please advise if the steps I outlined are feasible.

[Hebell]

Your initial enrollment period starts 3 months before you turn 65 and goes to 4 months thereafter.

Your plan is very bad.

If you are on COBRA and you get outside that initial enrollment period, you will no longer have guaranteed issue for your Medicare. It's only during the initial enrollment period that you do not require underwriting (really talking about the supplement plan here).

I'd recommend you get on Medicare when you can. Make sure you are well within that period.

[id0ntkn0wjack]

Strongly advise you invest in Medicare for Dummies which is actually pretty good at providing visibility on different signup options.

I am uncertain why you would select COBRA vs Medicare since you’re on the hook for 100% of your insurance premiums while on COBRA, but perhaps you have a reason.

[cashmoney]

Your initial enrollment period starts 3 months before you turn 65 and goes to 4 months thereafter.

Your plan is very bad.

If you are on COBRA and you get outside that initial enrollment period, you will no longer have guaranteed issue for your Medicare. It's only during the initial enrollment period that you do not require underwriting (really talking about the supplement plan here).

I'd recommend you get on Medicare when you can. Make sure you are well within that period.

open enrollment GI is within 6 months after turning 65 or enrolling in part B

[2020 ButClassic]

Below are quotes from various corporate and government entities regarding the Special Enrollment Period (SEP) for Medicare:

"There are two kinds of Medicare Special Enrollment Periods. A Medicare Special Enrollment Period allows you to switch plans or sign up for Medicare outside of the standard Medicare enrollment periods".

"Special Enrollment Period – Qualifying Life Events: 2 months"
"Special Enrollment Period – Working Past 65: 8 months"

My interpretation is that I fit the 8-month Special Enrollment Period category. Not so?

[Hebell]

Why anybody would want to skip the IEP and go with the SEP when it is one of the most important transitions in your life, I don't know. I stand by my 7-month window. The IEP is a standard process that works smoothly. The SEP is non-standard and tailored to your situation. Why the heck go through that bother?

The difference in premiums (as you mentioned in your decision-making, cobra versus Medicare) is almost irrelevant.

Particularly now, if social security staff is reduced, I would do the procedure that is most automated and least likely to have screw ups.

[cashmoney]

Below are quotes from various corporate and government entities regarding the Special Enrollment Period (SEP) for Medicare:

"There are two kinds of Medicare Special Enrollment Periods. A Medicare Special Enrollment Period allows you to switch plans or sign up for Medicare outside of the standard Medicare enrollment periods".

"Special Enrollment Period – Qualifying Life Events: 2 months"
"Special Enrollment Period – Working Past 65: 8 months"

My interpretation is that I fit the 8-month Special Enrollment Period category. Not so?

Part B Special Enrollment Period - you have 8 months from the time you dropped qualifying employer health insurance from active employment or spouses active employment sign up for part B without penalty

Once you start part B you have a 60 day SEP- Loss of Employer Coverage to to enroll in either a part D plan or MA otherwise you have wait to enroll in the Annual Enrollment Period

You a six month from part B start date to get a guarantee issue for a medigap policy.

Make sure your cobra rx coverage is creditable for part d-it usually is.

[cashmoney]

Why anybody would want to skip the IEP and go with the SEP when it is one of the most important transitions in your life, I don't know. I stand by my 7-month window. The IEP is a standard process that works smoothly. The SEP is non-standard and tailored to your situation. Why the heck go through that bother?

The difference in premiums (as you mentioned in your decision-making, cobra versus Medicare) is almost irrelevant.

Particularly now, if social security staff is reduced, I would do the procedure that is most automated and least likely to have screw ups.

It is 100% absolutely 6 months from date you start B .look at any states medigap consumer guide to see it in writing.A part b Special enrollment is a little extra work but if a person knows the process it is fairly straightforward and can be initiated 3 months out from start date of part B.I wouldn't do it to save 100.00 but i would definitely do it to save a 1000.00 As of right now a part b special enrollment done correctly is taking between 1-3 weeks to get processed but that will probably be increasing with SS staff reduction.

[Hebell]

IEP is 7 months. See Medicare paragraph below. And yes, even for $1000 I would urge you to use the standard transition into Medicare and avoid the SEP. Peace. Out.

https://www.cms.gov/training-education/ ... eir%20IEP.

[cashmoney]

IEP is 7 months. See Medicare paragraph below. And yes, even for $1000 I would urge you to use the standard transition into Medicare and avoid the SEP. Peace. Out.

https://www.cms.gov/training-education/ ... eir%20IEP.

the 7 month IEP window that begins 3 month before you turn 65 to enroll into medicare and the 6 month GI for medigap are two completely different subjects.These are facts

[ModifiedDuration]

Below are quotes from various corporate and government entities regarding the Special Enrollment Period (SEP) for Medicare:

"There are two kinds of Medicare Special Enrollment Periods. A Medicare Special Enrollment Period allows you to switch plans or sign up for Medicare outside of the standard Medicare enrollment periods".

"Special Enrollment Period – Qualifying Life Events: 2 months"
"Special Enrollment Period – Working Past 65: 8 months"

My interpretation is that I fit the 8-month Special Enrollment Period category. Not so?

Good to go with the 8-month Special Enrollment Period for Medicare and then the Initial Enrollment Period for a Medicare Supplement Plan.

You would also have a Special Enrollment Period for Part D, as long as your COBRA coverage is creditable for Part D purposes.

[Vinny_in_NJ]

I'm pretty sure you can not take medical COBRA once you turn 65, you must take Medicare. You can take dental cobra but not medical.

[Hebell]

Using your IEP for both at age 65 for Medicare and Medigap will remove ALL this risk.

[Duzz78]

You would also have a Special Enrollment Period for Part D, as long as your COBRA coverage is creditable for Part D purposes.

Concerning creditable coverage, this is also true of the plan you will be on after you turn age 65 and before you go on COBRA. You need to make sure that whatever medical plan you are on through your employer once you turn 65 (that month), the drug coverage portion of that plan is "medicare creditable". If it is not, then you will pay a Part D penalty for every month that you do not have a "medicare creditable" plan. This penalty would be paid monthly and is for the rest of your life. Your HR or the insurance provider should be able to confirm that information. If any plan is not compliant, then you should purchase a Part D plan when you turn 65.

[cashmoney]

Below are quotes from various corporate and government entities regarding the Special Enrollment Period (SEP) for Medicare:

"There are two kinds of Medicare Special Enrollment Periods. A Medicare Special Enrollment Period allows you to switch plans or sign up for Medicare outside of the standard Medicare enrollment periods".

"Special Enrollment Period – Qualifying Life Events: 2 months"
"Special Enrollment Period – Working Past 65: 8 months"

My interpretation is that I fit the 8-month Special Enrollment Period category. Not so?

Good to go with the 8-month Special Enrollment Period for Medicare and then the Initial Enrollment Period for a Medicare Supplement Plan.

You would also have a Special Enrollment Period for Part D, as long as your COBRA coverage is creditable for Part D purposes.

the 2 month special enrollment period to enroll in part d outside the annual enrolment period is valid when dropping employer sponsored coverage whether or not the previous rx coverage is creditable but obviously there is a part D late enrollment penalty if it's not.

[2020 ButClassic]

I'm pretty sure you can not take medical COBRA once you turn 65, you must take Medicare. You can take dental cobra but not medical.

I am coming around to this realization.

It sounds like it is not so much about having 3, 6 or 8 months to sign up for Medicare after retirement. The flaw in my understanding was that I assumed I could fill that void through COBRA. The presumed 3, 6 or 8 months wait time seems to be just the grace period to avoid penalties. It does not, however, mean that I can use COBRA in the meantime -- at least not for the medical portion.

Assuming that the above is correct, I should plan ahead so I am on Medicare the month following my retirement.

Please advise if I got this right this time.

[Vinny_in_NJ]

I'm pretty sure you can not take medical COBRA once you turn 65, you must take Medicare. You can take dental cobra but not medical.

I am coming around to this realization.

It sounds like it is not so much about having 3, 6 or 8 months to sign up for Medicare after retirement. The flaw in my understanding was that I assumed I could fill that void through COBRA. The presumed 3, 6 or 8 months wait time seems to be just the grace period to avoid penalties. It does not, however, mean that I can use COBRA in the meantime -- at least not for the medical portion.

Assuming that the above is correct, I should plan ahead so I am on Medicare the month following my retirement.

Please advise if I got this right this time.

Medicare is available on the first day of the month you turn 65. It also only starts on the first day of the month. If you work past your 65th birthday and work for a company that has more than 20 employees then you don't have to take Medicare at 65. I would check with your company if they will cover you to the end of the month or the day you leave for your medical benefits, my company stopped coverage the day I left. So for me I had to coordinate my last day of company coverage with the first day of Medicare coverage. As it turned out my last day (end of month) was a Friday and my first day of retirement was a Saturday ... all good!

I would definitely start ahead of time to coordinate the coverages. I didn't have a tax free medical account (I think that's a HSA) so it was an easy transition from one to another. I mentioned timing and I retired the month of my birthday vs the month after my birthday (I was basically sitting around collecting a paycheck) but we would have been without coverage for 2 days due to a weekend. Also, I think you can start the process 3 months ahead of time and I really recommend you take full advantage of all that time in case of any issues. I found out that Medicare had themselves as a secondary insurance to my company's insurance with my wife's Medicare correct, I held the medical coverage for both of us.

[Hebell]

I'm pretty sure you can not take medical COBRA once you turn 65, you must take Medicare. You can take dental cobra but not medical.

I am coming around to this realization.
...

Assuming that the above is correct, I should plan ahead so I am on Medicare the month following my retirement.

Please advise if I got this right this time.

After all this, and all these subtleties, hopefully you have a better appreciation of why I said just start everything on the month if your 65th birthday and forget Cobra! There are too many things that can go wrong, or just be a bureaucratic headache for you. (And yes, to your Cobra question. You must transition, as Medicare must be primary. I can't even imagine why you would want to do both, unless there is some obscure medical condition in which your Cobra policy would be beneficial. Of course I am assuming you put in place a medigap policy/supplement.)

[Vinny_in_NJ]

In my short time being on Medicare with a Plan N supplement and Part D drug plan the cost overall has been better than my company's medical plan. We pay slightly more in premiums but very little OOP; my company's plan had about $10K OOP for both of us. I don't know if there are medical procedures that Medicare won't cover vs what I had but so far everything we have had done seems to be covered the same. I am carrying COBRA dental insurance for now as my wife has had a couple of dental issues toward the end of my employment.

[Saving$]

Part A is free and most companies request a 65 year old to sign up for part A.

This, except you may need to change "request" to "require."
There is really no reason (of which I am aware) to NOT sign up for Part A. Unless your profession is reading insurance contracts and you are skilled at it, and you have read your employers entire contract, I would be concerned there is some fine print somewhere that requires those 65 or over to be on Part A. It can be a huge cost savings to the insurer. Not signing up for Part A risks finding out too late that your employers insurer will not cover something that Part A would have paid for.

[Saving$]

Assuming that the above is correct, I should plan ahead so I am on Medicare the month following my retirement.

Please advise if I got this right this time.

Yes, with a caveat.
You should get Medicare Part A as of your 65th birthday.
You should confirm your employers plan covers you until the end of the month if you are employed on the first of the month. Most, but not all, will.
You should add Medicare coverage (either [Part B + Medigap + Part D] or [Part B + Medicare Advantage]) to start as of the time after your 65th birthday that your employers plan no longer covers you.

[ModifiedDuration]

Part A is free and most companies request a 65 year old to sign up for part A.

This, except you may need to change "request" to "require."
There is really no reason (of which I am aware) to NOT sign up for Part A. Unless your profession is reading insurance contracts and you are skilled at it, and you have read your employers entire contract, I would be concerned there is some fine print somewhere that requires those 65 or over to be on Part A. It can be a huge cost savings to the insurer. Not signing up for Part A risks finding out too late that your employers insurer will not cover something that Part A would have paid for.

One would not want to sign-up for Part A at age 65 if they are still working and want to contribute to an HSA, as you cannot contribute to an HSA when you have any Part of Medicare.

[cashmoney]

I'm pretty sure you can not take medical COBRA once you turn 65, you must take Medicare. You can take dental cobra but not medical.

I am coming around to this realization.

It sounds like it is not so much about having 3, 6 or 8 months to sign up for Medicare after retirement. The flaw in my understanding was that I assumed I could fill that void through COBRA. The presumed 3, 6 or 8 months wait time seems to be just the grace period to avoid penalties. It does not, however, mean that I can use COBRA in the meantime -- at least not for the medical portion.

Assuming that the above is correct, I should plan ahead so I am on Medicare the month following my retirement.

Please advise if I got this right this time.

You can absolutely use Cobra as your primary insurance after you turn 65 whether you enroll in part A or not you just want to make sure you sign up for part b within 8 months of coverage from active employment to avoid part B penalty and also to ensure you won't have to wait until the general enrollment period ( 1/1-3/31 ) to be able to enroll in part B. You then have a 6 month from the time you part B starts to purchase a medigap with no underwriting.(many medigap carriers will let you purchase the Medigap policy up to 6 month before the start date even if you don't have a medicare number yet)) Whether or not you should is a matter of simple math-how much are you saving postponing Medicare premiums with irmaa on part b and D .Probably not worth for a few hundred dollars but if you are talking about anything significant it may be worth but make the decision based on facts not fear. You mentioned you were worried about starting over with deductibles - that is really not a big issue transitioning in to Medicare .

I have been a licensed agent for over 30 years and have helped many many people with their special enrollment in to part B and it is very routine as long as you follow the process in fact i helped someone a few weeks age who choose to keep cobra and the process took about 2 weeks from the time he submitted the paperwork to SS.I know there is DIY mindset on this forum for all things financial but if you do choose to use an agent any experienced agent will help you with this

[RetiredAL]

My spouse thought like the OP and continued to work past age 65 and did not sign up for Medicare. That's was a mistake that took quite a while to sort out.

Do yourself a favor and go to the source of good information: https://www.medicare.gov/basics/get-sta ... ng-past-65

Eventually when the time comes you will get form L564 from former employer that you will provide to Medicare.

You better make sure your employer knows about this form and has dealt with it before.

OP -- It's best to have your employer fill out the L564 form before you retire, while you still have access to your HR people. I got mine a week before I actually retired.

[cashmoney]

My spouse thought like the OP and continued to work past age 65 and did not sign up for Medicare. That's was a mistake that took quite a while to sort out.

Do yourself a favor and go to the source of good information: https://www.medicare.gov/basics/get-sta ... ng-past-65

You better make sure your employer knows about this form and has dealt with it before.

OP -- It's best to have your employer fill out the L564 form before you retire, while you still have access to your HR people. I got mine a week before I actually retired.

+1 you just want to make sure the end date of coverage documented on the form l564 or if no end date is noted on l564 that the sign date that is no more than 8 months from when you want part B to start. In most cases an HR department will complete this form for employee within 48 hours of receiving request.( a separate l564 is required for spouse)

[Vinny_in_NJ]

I was wrong about COBRA coverage, I could swear I read that COBRA wasn't allowed at 65 and older.

If you do the math Medicare could be cheaper than COBRA coverage especially if you have a high out of pocket maximum coverage. The only thing that may be cheaper in coverage vs Medicare is Part D drugs but that's not always the case. My cost for now is significantly higher than it was, my wife has basically just her Part D premiums at $2.50 per month.But the medical portion makes up the difference in total out of pocket we pay.

[gips]

Here are some considerations:

-I am in maximum IRMAA bracket so Medicare will not offer savings vs. COBRA. I have also contributed to deductibles which will be wiped away.

Retirement is considered a life changing event and you can file form ssa-44 to have your payment reduced.

Congrats on your retirement!