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Signing Up for Medicare When You’re Still Covered by an Employer’s Health Plan

You don’t have to sign up for full Medicare coverage at age 65 if you’re still covered under an employer’s plan. But you’ll need to watch enrollment deadlines.

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Q

I want to sign up for Medicare Part A when I turn 65 on October 11, but I plan to delay enrolling in Part B because I work at a large company with great health insurance. How do I sign up for Part A, and when does it take effect? And how do I eventually enroll in Part B?

A You have a seven-month window to enroll in Part A, which is free and covers hospital services. The enrollment period begins three months before the month you turn 65 and ends three months after your birthday month.

SEE ALSO: 10 Things You Need to Know About Medicare

You can enroll in Medicare online at SocialSecurity.gov or visit your local Social Security office, even if you’re not ready to receive Social Security retirement benefits yet. Go to the Apply for Benefits page to sign up for retirement or Medicare benefits. Also see the SSA’s Checklist For Online Medicare Application for a list of information you’ll need to complete the application. (Those who are already receiving Social Security benefits are automatically enrolled in Medicare at age 65. They will receive a Medicare card in the mail three months before their coverage starts, which is the first day of the month of their 65th birthday.)

The timing of your enrollment in Part A will determine when coverage kicks in. If you sign up before the month you turn 65, your coverage will take effect on the first day of your birthday month—October 1, in your case. (If your birthday had been on the first of the month, your coverage would take effect the first day of the previous month, or September 1.)

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Sign up in the month you turn 65 and your coverage will take effect on the first day of the next month. If you sign up one month after your birthday month, your coverage will take effect two months after enrollment. Enroll two or three months after your birthday month and the coverage will take effect three months after the month you sign up. See When Will My Coverage Start? at Medicare.gov for a helpful table illustrating the time frames.

For more information about the procedure, see the Medicare Benefits section of the Social Security Administration website. Also see How to Apply Online for Medicare Only.

Because you have health insurance through a large employer, you don’t have to sign up yet for Medicare Part A or Part B. Most people sign up for Part A at 65 because it is free (although some people delay signing up while working for a large employer so they can contribute to a health savings account -- see How Health Savings Accounts Work with Medicare for more information). But many people who have coverage through a large employer delay signing up for Part B, which carries a premium and covers outpatient care, such as doctors’ visits and tests. The same goes if you’re covered under a spouse’s workplace plan. (However, if the employer has fewer than 20 employees, Medicare will be your primary coverage at 65, so in that case you usually need to sign up for Part A and Part B even if you have coverage at work.)

You will need to enroll in Part B within eight months of losing your coverage at work when you leave your job (or when you lose coverage through a spouse’s employer).

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SEE ALSO: 7 Ways to Maximize Medicare Benefits

If you enroll while you’re still on your employer’s group health plan or during the first full month when you are no longer on the plan, your coverage can either begin on the first day of the month you enroll or start on the first day of any of the following three months. If you enroll during the remaining seven months of this “special enrollment period” after you leave your job, then your Part B coverage begins on the first day of the following month.

Failing to sign up by the end of your eight-month special enrollment period can trigger a permanent late-enrollment penalty, which is 10% of the current Part B premium for every year you delay. For more information, see Should I Get Parts A & B?

You won’t be able to sign up for Part B online if you delayed coverage past age 65. You will have to either mail your application or visit a Social Security office to provide evidence that you had coverage from your employer and shouldn’t be subject to a late-enrollment penalty.

For more information, see If You’re 65 and Still Working, Avoid Pitfalls and Maximize Benefits. Also see When to Sign Up for Medicare—and Why You Might Want to Delay.

SEE ALSO: Your Medicare Questions Answered

Got a question? Ask Kim at askkim@kiplinger.com.