It can be difficult to make Medicare decisions with the constant changes to the law. But add variables like whether or not you’re still taking work based insurance, and it gets even more complicated. This was the case for a working family in Schaumburg. With retirement approaching, they were in desperate need of understanding how to best structure their Medicare while working. To help understand how best to solve these problems, they worked with America United planner John T. Davis.
“Our family had job based insurance that they wished to keep for as long as possible, and they wanted to delay enrolling in Medicare while working without taking penalties” said John. “When you have job based insurance, There is no formal notification from the Social Security Administration or Medicare as to when you have enroll, and figuring things out can get tricky.”
Delaying Medicare While Working
The family wanted to delay taking Medicare while working, but if they delayed too long, the consequences could be huge! Normally, for every 12 months that people who are Medicare-eligible and not covered by employer insurance delay enrollment, they accrue a 10% penalty, which is then added to their monthly Part B premium amount. In most cases, the penalty lasts for as long as someone has Medicare!
“While it can be possible to delay Medicare enrollment without penalty,” said John, “and even delay taking the Medicare Part B premium, there are important things to know, such as whether your job based insurance will pay secondary or primary to Medicare. “Some people are misinformed by employers or don’t have reliable information about Medicare enrollment, leading them to delay enrollment in Medicare Part B and then incur penalties and high medical costs.”
“In most cases,” John continued “you should only delay enrollment in Medicare while working if your job-based insurance is the primary payer and Medicare is secondary. A primary payer means it pays first for your medical bills. There are additional enrollment considerations if you have a Health Savings Account (HSA); if you enroll in Medicare Part A and/or B, you can no longer contribute pretax dollars to your HSA.”
If this sounds complicated you’re not alone! These are even several more variables to take into account. For example, there are special rules governing the special enrollment period, through special employee sponsored plans called “COBRA” plans, and the Affordable Health Care Act.
After carefully listening to them John was able to help them delay their Medicare enrollment without accruing a penalty. Overall, it’s a problem that can be solved with simple listening, but have stunning results if not done properly.
All-in-all, the family now is better off than they were before, and sure to make many happy memories by using the money they saved to spend more time with their grandkids and other loved ones. If you are ready to plan Medicare around your family’s needs along with all other retirement planning solutions, set up a time to meet with John!
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