Working past 65 and fear of Medicare Penalties

The short answer is: if you’re covered by a health insurance plan from work that’s considered “credible coverage,” you will NOT be penalized if you do not enroll in Medicare.

Whether it’s depleting retirement funds to send kids to college, hanging on for a few more years to save for a cushier retirement, or (God forbid) enjoying what we do each day that we don’t want our jobs to end, many Americans are retiring from work later and later. 

Last week, I received a call from Steve (real name hidden to protect the innocent) who was 76 years old and still working.  His work provides him and his wife with health insurance.   He had not enrolled in Medicare yet but was looking to retire in the next 6 months.  He was worried that he was going to be penalized for waiting 11 years after he was eligible.

Steve checked with his benefits manager and was assured his coverage was “credible.” 

He was relieved to learn he would not be subject to the Part B (10% a year not enrolled) or Part D (1% a month not enrolled) penalty because he was covered through work.

He also did not have to wait for the Annual Enrollment Period (10/15-12/7 each year) nor the Part B Annual Enrollment Period (1/1-3/31) because he would qualify for a Special Enrollment Period (SEP) when he retires and his current health insurance ends.

If Steve continued working and liked his work plan, then he will still mostly likely be able to stay on his work plan until he retires. 

All information compiled from cms.gov