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Skip JacksonAggressive Senior Solutions

Retiring or leaving employer coverage after 65

If you kept working past 65, moving to Medicare takes a few careful steps. Here's how to switch without a gap in coverage or a late penalty.

Rules about employer coverage can be complicated, and every situation is a little different. Please confirm the details with your employer's benefits office and with Social Security before you make a decision. I'm glad to help you prepare the questions.

Your 8-month window to sign up for Part B

If you delayed Part B because you had health coverage through your own or your spouse's current job, you get a Special Enrollment Period later.

It lasts 8 months. It begins the month after the job ends or the coverage ends, whichever happens first.

If you sign up during these 8 months, you generally won't pay a Part B late penalty. To avoid a gap, it's best to sign up before your employer coverage ends, so Part B starts the first day of the month after your employer coverage ends.

COBRA and retiree coverage don't count

This is a common and costly mistake. COBRA and retiree health plans are not coverage based on current employment.

  • Your 8-month window starts when your job ends, even if you're on COBRA. It doesn't wait until COBRA runs out.
  • If you wait until COBRA ends to sign up for Part B, you may miss your window. That can mean a late penalty and a gap in coverage.
  • Once you're eligible for Medicare, COBRA and many retiree plans usually pay second. If you don't have Part B, they may not pay for much.

If you're thinking about COBRA, let's talk about how it would work alongside Medicare before you decide.

Does your employer have 20 or more employees?

The 8-month Special Enrollment Period is available no matter the employer's size. Size decides which coverage pays first:

  • 20 or more employees. Your job-based plan generally pays first and Medicare pays second. Many people in this situation can delay Part B without a penalty.
  • Fewer than 20 employees. Medicare generally pays first. Your job-based plan may pay little or nothing for care Medicare would have covered. You'll usually need Part A and Part B when you're first eligible.

There are exceptions, such as some plans shared by several employers. Ask your benefits office in writing how their plan works with Medicare.

Paperwork you'll need

When you sign up for Part B outside your first enrollment window, Social Security needs proof that you had job-based coverage.

  1. Form CMS-40B, the application for Part B.
  2. Form CMS-L564, the Request for Employment Information. Your employer fills out the section that confirms your coverage dates.

Ask your employer to complete the CMS-L564 early, before your last day if you can. You can find both forms and ways to submit them at ssa.gov. If your employer can't fill out the form, Social Security may accept other proof. Call Social Security at 1-800-772-1213 to ask.

Drug coverage

If your job-based drug coverage was creditable, you can join a Part D plan or a Medicare Advantage plan with drug coverage later without a Part D penalty. You'll generally have 2 full months after that coverage ends to join. Keep the yearly notice from your plan that says your coverage was creditable.

Health Savings Accounts

If you have a Health Savings Account (HSA), you can't add money to it once any part of Medicare starts, including Part A. Starting Social Security benefits automatically enrolls you in Part A.

When you sign up for Medicare after 65, Part A coverage can start up to 6 months before the date you apply, but not before the month you turned 65. To avoid a tax penalty, many people stop HSA contributions about 6 months before they apply. You can still use the money already in your HSA. Please talk with a tax advisor about your situation.

Medicare Supplement timing

Your 6-month Medigap Open Enrollment Period starts when your Part B begins. During that time, you can buy any Medicare Supplement plan sold in Georgia that you're eligible for. A company can't turn you down or charge more because of your health, though it may delay coverage of a pre-existing condition for up to 6 months if you didn't have prior creditable coverage. Read about Supplement plans.

A simple checklist

  • Ask your benefits office how their plan works with Medicare, and get the answer in writing.
  • Get form CMS-L564 completed by your employer.
  • Find out your last day of employer coverage, and apply for Part B so it starts the first day of the month after that coverage ends.
  • Stop HSA contributions in time, if you have an HSA.
  • Compare Medicare Advantage, Supplement, and Part D options with me.
  • Confirm the details with Social Security at 1-800-772-1213.