I turn 65 in a few months. When should I sign up for Medicare?

The phrase “active employer” is key. If you have other insurance that isn’t from your own or your spouse’s current employer, you’ll still need to sign up for Medicare during your initial enrollment period. You need to sign up during your IEP in any of these circumstances, if you have:

• COBRA health coverage that extends the insurance you or your spouse received from an employer while working

• Health insurance that you bought yourself and didn’t come from an employer

• No health insurance

• Retiree health benefits from your own or a spouse’s former employer

• Veterans benefits from the Department of Veterans Affairs (VA) health system but no insurance from a current employer

When does Medicare start?

If you sign up for Medicare Part B during the seven-month initial enrollment period, you should consider three important time frames. The best way to sign up for Medicare during your initial enrollment period is online at the Social Security website.

If you enroll during the first three months of your initial enrollment period, your Medicare coverage begins on the first day of the month you turn 65 or the first day of the previous month if your birthday falls on the first day of a month. 

If you sign up for Part B during the month you turn 65, coverage begins the first day of the following month.

If you sign up for Part B during the three months after you turn 65, coverage begins the first day of the following month.

You can sign up for premium-free Part A anytime after your initial enrollment period starts. Your coverage will take effect six months retroactively but no earlier than the month you turned 65.

But if you miss your initial enrollment period, you may need to wait until the general enrollment period (GEP) to sign up for Part B. The GEP runs Jan. 1 to March 31 each year. Coverage starts the month after you enroll. Keep in mind that you may also have to pay a late enrollment penalty.

Do I qualify for a Medicare special enrollment period?

You may not have to wait until the general enrollment period or pay a late enrollment penalty if you delay signing up for Medicare because you or your spouse is still working and you have health insurance from that employer. The special enrollment period (SEP) allows you to sign up for Medicare Part B throughout the time you have coverage from your own or your spouse’s employer and for up to eight months after the job or insurance ends, whichever occurs first.

If you enroll at any point during this time, your Medicare coverage will begin the first day of the following month. And you won’t be liable for late penalties, no matter how old you are when you finally sign up.

Your decision also depends on the size of your employer and whether the employer’s plan is first in line to pay your medical bills or second.

Larger companies. If you or your spouse works for a company with 20 or more employees, you can delay signing up for Medicare until the employment ends or the coverage stops, whichever happens first. These large employers must offer you and your spouse the same benefits they offer younger employees and their spouses, which means that the employer’s coverage can continue to be your primary coverage and pay your medical bills first.

Many people enroll in Medicare Part A at 65 even though they have employer coverage, because it’s free if they or their spouse has paid 40 or more quarters of Medicare taxes. But they often delay signing up for Part B while they’re still working so they don’t have to pay premiums for both Medicare and the employer coverage.

However, if you want to continue contributing pretax dollars to a health savings account (HSA), you should wait to sign up, even for Part A. You can’t contribute to an HSA after you enroll in Medicare.

Small businesses. If you or your spouse works for a company with fewer than 20 employees, Medicare generally becomes the primary coverage at age 65 and the employer’s coverage becomes secondary. That means Medicare pays your medical bills first and your company’s group plan pays only for services it covers but Medicare doesn’t.

In this case, you usually need to sign up for Medicare during your IEP to avoid big coverage gaps.

Living abroad. The rules and issues to consider can be different if you’re living outside the United States.

Keep in mind

Part C, Medicare Advantage. You also have the option to enroll in a private Medicare Advantage plan during your IEP after you sign up for Part A and Part B.

Part D prescription plans. The rules are different for prescription drug coverage. You can sign up for private Part D coverage during your initial enrollment period, but you aren’t required to enroll if you have other prescription drug coverage that’s considered at least as good as the Medicare-approved plans.

This “creditable coverage” can be from a current employer, retiree coverage, Tricare or another source. You won’t be liable for Part D late enrollment penalties if you sign up within 62 days of losing your other prescription coverage.

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