What To Do When You Are Turning 65, Are Actively Employed And Have University Medical Coverage

When you are turning 65, you are eligible to apply for Medicare during your Initial Enrollment Period.  You can sign up any time during the 7-month Initial Enrollment Period which begins 3 months before the month you turn 65, includes the month you turn 65 and ends 3 months after the month you turn 65.

Enrollment in Medicare is not automatic when you reach age 65, so you will need to take steps to sign up for Part A and/or Part B.  In most cases, there is no cost to enroll in Part A but there is a cost to enroll in Part B. You can delay enrollment in Part B while you are still working and you have University medical coverage.  Please note, you can sign up for Part B without a penalty any time you have medical coverage while still working at WSU.

If you don't sign up for Part B when first eligible, you also have an 8-month Special Enrollment Period to sign up that starts the month after your employment ends or your WSU medical coverage based on active employment ends, whichever happens first.  In most instances, you don't pay a late enrollment penalty if you sign up during a Special Enrollment Period.  Keep in mind, COBRA and retiree health plans aren't considered coverage based on active employment. You're not eligible for a Special Enrollment Period when that coverage ends.

Most people will pay the standard monthly Part B premium of $104.90 for 2015, but some may pay a higher premium based on their income. If you file an individual tax return and your modified adjusted gross income is $85,000 or more, or if you file a joint tax return and it is $170,000 or more, your monthly Medicare Part B premium may be higher than the standard premium.

If you enroll in Part A and/or Part B while still working, your University medical coverage will pay primary to your Medicare coverage.  That means your medical expenses must be billed to the University health coverage first and then to Medicare if there is a balance.  It may not make sense to enroll in and pay for Part B when you have University medical coverage while still working.  It is recommended that you sign up for Part A when first eligible because there is no cost to enroll. Also, if you have Part A coverage when your medical coverage based on active employment ends, you still have the right to elect COBRA coverage, and COBRA coverage may not be terminated early because of Medicare entitlement.

To sign up for Medicare Part A, you can:

When your employment ends, three things happen:

  1. You have 8 months to sign up for Part B without a penalty (this is the Special Enrollment Period), whether or not you choose COBRA. If you choose COBRA, don't wait until your COBRA ends to enroll in Part B. If you don't enroll in Part B during the 8-month Special Enrollment Period, you may have to pay a penalty.  And, you won't be able to enroll until January 1–March 31 for a July 1st effective date of coverage.
  1. You will be offered COBRA coverage, which continues your current University medical coverage (in most cases for only 18 months) and at the full monthly premium rate, not just the employee contribution amount.  If you already have Medicare Part A, you have the right to elect COBRA coverage (and COBRA coverage may not be terminated early because of Medicare entitlement).  Medicare coverage will pay primary and COBRA coverage will pay secondary.  If you sign up for Medicare after you elect COBRA coverage, your COBRA coverage will end when your Medicare coverage becomes effective.   
  1. You may also be offered Retiree medical coverage through the University.  You are eligible for Retiree medical coverage when you meet the University criteria for retiree benefits namely when you have attained age 55 and have 10 years of service with the University or 5 years of University contribution in the retirement program.  Retiree medical coverage will be secondary to Medicare, so you will have to be enrolled in Medicare Part A and Part B in order to be covered as a Retiree.

If you elect COBRA coverage when your employment ends rather than Retiree coverage, you may enroll in Retiree coverage when your COBRA coverage expires.  You will have 30 days from the date your COBRA coverage expires to enroll in Retiree coverage.  If you miss this deadline, you may enroll in Retiree coverage at the next annual open enrollment for a January 1st effective date.

Note:  If COBRA coverage or University Retiree coverage isn't right for you, there are other coverage options available.  There are Medigap plans and Medicare Advantage plans that you can purchase on your own.  Keep in mind, there is a 6-month Open Enrollment Period for Medigap coverage that begins on the first day of the month in which you are age 65 and enrolled in Medicare Part B.  After this enrollment period, your option to buy a Medigap policy may be limited and it may cost more.

For more information about enrolling in Medicare, its benefits and costs, as well as Medigap and Medicare Advantage plans, please go to www.medicare.gov.