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Understanding Social Security: Should I sign up for Medicare?


Dear MarketWatch,

Many of my peers insist that I need to sign up for Social Security now that I’m 65 and that I have a limited “window” of time when I can do so. But from what I read, as long as I am still working full time and getting benefits from my employer, I do not need to sign up for Social Security now and that I should wait until I am no longer working full time. What is the right thing to do?

​Dear reader, ​

I am going to go out on a limb here and guess that your peers are suggesting that you sign up (enroll) for Medicare at 65, rather than Social Security. Given the context of your message, that makes the most sense. There is no need to sign up for Social Security at age 65, in fact you can delay out to as late as age 70.

Read: Do I need to enroll in Medicare if I’m still working at 65?

If I’m correct in my guess, your peers are not wrong to suggest this to you. Medicare enrollment is something that has very little flexibility, and a somewhat narrow window for enrollment, as your peers have suggested. You are allowed to enroll during the 3 months prior to your 65th birthday, during the month of your 65th birthday, and for the three months following your 65th birthday. The window is a total of 7 months for enrollment.

Read: What you need to know about Medicare

If you tried to enroll prior to that window, your application would be rejected (actually you wouldn’t be allowed to complete the application unless you are receiving Social Security Disability Income, or if you have ALS or end-stage renal disease). If you enroll at some date after the 7​-​month window, there would be a delay before you can enroll, plus a penalty applied to your Medicare Part B premium for the rest of your life, unless you meet the creditable coverage exception.

Read: The basics of Medicare IRMAA — What is it and how can it impact you?

Here’s where your case comes in: Assuming that your employer health plan is considered “creditable” by Medicare, you are allowed to delay your initial age-65-based enrollment for Medicare until such time as you are no longer employed by an employer providing creditable coverage. If you enroll in Medicare upon leaving employment at some age after age 65, if you’ve had creditable coverage during your post-age-65 time, this is allowed without the premium penalty described above.

Read: Medicare enrollment doesnt have to be that complicated

You should check with your HR department to determine two things: 1) If your employer’s healthcare plan is “creditable”, allowing for a delay in enrolling past age 65; and/or 2) If your employer’s plan allows you to delay Medicare enrollment when you are eligible.

Many smaller employer plans require folks who are age 65 and otherwise eligible for Medicare to go ahead and enroll, making Medicare the primary plan. Then you could maintain coverage by the employer plan as a supplement to Medicare. Larger (more than 20 employees) employers’ plans often are fully creditable and can take the place of Medicare until you leave employment. At that time you’d need to enroll in Medicare, even if you have COBRA or retiree healthcare coverage.

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