Most individuals covered under Original Medicare receive Medicare Part A without paying a premium if you have worked for at least 10 years or 40 quarters and have paid Medicare taxes during this employment period. Medicare Part B charges a monthly premium to most beneficiaries regardless of years worked.
Usually, if you do not enroll in Medicare Part B when you are first eligible but enroll later, you may have to pay a late-enrollment fee that is a 10% higher premium over the entire time you are enrolled in Medicare.
However, those who are eligible for Medicare but are working and receive health coverage through their own or a spouse's employer or union are allowed to delay enrollment in Medicare Part B. For these individuals, Medicare provides a Special Enrollment Period (SEP), a seven-month enrollment period that is penalty-free for Medicare B enrollment.
You may be eligible for a SEP if you are 65 years old or older, you or your spouse is still employed, and you receive coverage from a health plan due to your employment.
The Start and End of SEP
You are allowed to enroll in Medicare Part B while you are still employed and receive coverage from the employer or union health plan. Your SEP will begin the month when your employer or union health coverage ends or when you stop working, whichever comes first. Your SEP will last for 8 months following the termination of your work or of your employment-based health coverage.
It is important to enroll in Medicare Part B during SEP.Though you will have the opportunity to enroll in Medicare Part B after your SEP, you will have to pay a higher Medicare Part B premium as a late enrollment penalty for the entire time you are enrolled in Medicare Part B if your employer or union health coverage ends and you do not enroll in Medicare Part B during the SEP and instead, enroll during the General Enrollment Period.
Restarting SEP
In some cases, you may have un-enrolled in Medicare Part B because you or your spouse or family member (only applicable if you are disabled) returned to work and begin to receive coverage under an employer or union group health plan. You can re-enroll in Medicare Part B without penalty during another SEP that begins once you or your spouse has again stopped working or no longer receive employment-based health coverage.
It is important to remember that your employment-based health coverage should be active before you un-enroll in Medicare Part B.
Please note that once your Medicare Part B coverage becomes effective, your Medigap (Medicare Supplement) Open Enrollment Period starts. You should enroll in a Medigap plan if you are interested in receiving additional coverage not provided by Original Medicare.
Once your six-month Medigap Open Enrollment Period starts, you will not be able to change or restart that period. This means you will not get another Medigap Open Enrollment Period if you drop Medicare Part B and then re-enroll in Medicare Part B at a later time.
If you are interested in continuing to work and want to keep your employer or union health insurance, contact your benefits administrator to determine when you should enroll in Medicare Part B.
