Do I Need Medicare Part B While I'm Still Working?

Q: I’m turning 65 and have signed up for Medicare Part A. I plan on working at my company for the next two years. It offers group health insurance that is primary to Medicare. Is there an advantage to enrolling in and paying for Medicare Part B or am I better off declining Part B and signing up for it when I retire from my employer? --John

A: You’re in good company. Nearly 20% of Americans age 65 and over are in the labor force, according to the Bureau of Labor Statistics. You become eligible for Medicare coverage at age 65, and will typically get Part A hospital coverage free, but the extent to which you need Part B coverage will depend on your employer plan.

Part B covers doctors’ visits and other services and costs a monthly premium of $134 for most 2017 enrollees (higher-income beneficiaries pay more).

If you’re covered by a group health plan through your current job, and your employer has 20 or more employees, then the group plan is generally primary to Medicare—that is, the group plan pays your claims first. If you opt to take Part B in addition to your group plan, then your doctor can bill Medicare for secondary payment. In that scenario, Medicare only pays for what it would normally cover that wasn't covered by the primary plan.

"Usually, that’s not much,” says Joe DeLuca, director of sales at eHealthMedicare.com, a broker that helps consumers select private Medicare plans. That’s why in most cases it makes sense to stay with good employer-sponsored coverage and delay your Part B effective date, he adds.

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But check the specifics of your company plan to be sure it fits your needs: How high is the deductible? What network of doctors can you access, and what kind of drug coverage does it offer? Some employers offer their older employees incentives to go onto Medicare, often in the form of a cash stipend, and that should be factored into your calculations, DeLuca says.

If you decline your company coverage and decide to enroll in Part B instead, then you have other decisions to make as well, including about a Part D drug plan and a supplemental Medigap policy. You could alternatively opt to enroll in Part C, otherwise known as Medicare Advantage, which are private plans approved by the government to offer Part A and Part B for an additional monthly premium. These plans typically cover drugs as well and and may cover services that original Medicare doesn’t, such as vision or hearing services.

A broker such as eHealthMedicare can help you compare your employer plan with your options under Medicare. There is typically no charge to you but the broker will be paid by the insurance company if you decide to enroll in a Part D, Medicare Advantage, or Medigap supplement plan through them.

If you hold off on Medicare for now, be sure to mind the deadlines on when you will need to sign up to avoid penalties for late enrollment in Part B and Part D, an extra amount added to your premium that you will pay for the duration you have that coverage. You usually don't face a Part B late enrollment penalty if you sign up during the grace period after you retire, which is eight months after the month after the group health plan ends or after your employment ends, whichever happens first. For Part D, you may owe a late enrollment penalty if, for any continuous period of 63 days or more after your initial enrollment period is over, you go without Part D, Part C, or other creditable prescription drug coverage.