Penalties to be aware of when staying on employer benefits
When you turn 65 you automatically become eligible for Medicare but if you are still working and have a decent health plan, you may not be interested in jumping to all parts of Medicare just yet. While it’s completely up to your circumstance, there may be some penalties you want to watch out for.
Lifetime late enrollment fees
Original Medicare consists of Parts A and B. Medicare Part A is premium-free for anyone over the age of 65. Medicare Part B, which covers outpatient care, comes with a premium. If you decide to continue on your employer health care plan, you can delay enrolling in Medicare Part B but that decision will impact you for years to come.
If you do not sign up for Part B you’ll pay a fee of 10% for each 12-month period that you are eligible but decide not to enroll.
You’ll also pay a higher premium if you delay enrolling in Medicare Part D, or prescription drug coverage.
Because these penalties are long-lasting you should consult with a Medicare professional as soon as you become eligible to see what makes the most sense for you.
No more HSA
If you decide to enroll in just a portion of Medicare but still want to keep your employer’s plan, be aware that you cannot contribute to an HSA account. In order to contribute pre-tax dollars to an HSA account you cannot have other health insurance. You may still withdraw money from your HSA account after enrolling in Medicare.
Why would I stick with my employer’s health plan?
Medicare rules depend on the size of your company. If you work for a company with less than 20 employees it may make the most sense to drop your company plan and switch to Medicare to avoid paying higher premiums. If you work for a large company, your premiums may not increase as much.
Some people stick with an employer’s health plan to benefit their spouse or dependents who depend on them for their health insurance. Your spouse does not qualify for Medicare until age 65.
Everyone’s case is different and there are dozens of Medicare plans with options you may not have considered. No matter your circumstance, it’s best to sit down with a professional to go over your options and make a plan that works for you.
Diane “Dee” Lee Insurance, is an experienced licensed insurance broker and representative providing Medicare (parts A and B), supplemental Medicare, Medicare Advantage (part C) and Medicare Prescription (part D) plans. Diane Dee Lee Insurance also provides healthcare plans to cover dental vision, hospital stays and more. Serving as a Medicare Broker in Deer Valley, Peoria, Glendale, the Phoenix-metro area, as well as the counties of Pima, Pinal, Coconino, Gila, Mohave, Apache, Navajo, Maricopa and Yavapai. Licensed and appointed with multiple insurance carriers, Dee is available to meet in person (with necessary social distancing guidelines) or virtually. Please call (623) 251-6612 or email email@example.com