UNITED STATES—Toni: I have just enrolled in Medicare A&B. I am still working with my husband and myself covered under my employer plan and I plan to retire in 14 months.

I enrolled in part B for many reasons and discovered that I am being charged a much higher premium because the 2018 tax return showed higher earnings.  Now I am wondering if I made a mistake by enrolling while working.  Can you please explain what one turning 65 with employer benefits should do?  Thanks, Tammy from Dallas, TX.

Tammy: I have good news for you because Medicare does allow employees with “true” employer benefits to delay Medicare Part B enrollment without penalties if you enroll later. Delaying does involve having employer group health coverage thru your or your spouse’s employer.

If you do NOT have “true” employer group health coverage, then missing your enrollment period is going to mean that you will be paying penalties. With that in mind, what does Medicare define as employer group health coverage?

Medicare recognizes true employer and union health plans with the Medicare recipient and/or their spouse working full-time for that specific employer as qualified to be able to delay Medicare.  If you are in this situation, then you are in the position where you can delay Medicare Part A and/or Part B for the working health covered individual and their non-working health covered spouse.

“COBRA and retiree health coverage do not count as current employer coverage,” according to the Medicare and You Handbook. Essentially, if you have this type of health insurance coverage, you are not going to be able to delay your Medicare Part B.

Most individual health plans or not having health insurance benefits at all are not going to fall under creditable, acceptable health insurance coverage. Let me repeat individual and retirement health plans are not current employer coverage for those that are self-employed or retired.

A Working Spouse: Does It Matter? What if I have a working spouse receive your health insurance coverage from their employer? If the working spouse is providing health insurance benefits from their employer group health coverage, as I previously mentioned, then one may want to delay enrolling in Medicare Part B. It is important to create a paper trail for Medicare and Social Security, so that you do not incur a penalty when one ends up enrolling in Medicare Parts A and/or Part B using the Special Enrollment Period.

You might continue to work either part-time or as a self-employed individual, taking advantage of the coverage provided by your spouse. I want to point out that some companies may ask you to enroll in Medicare once you are eligible, regardless whether your spouse continues to work for the company. Therefore, it is important to check with your spouse’s Human Resources Department to determine if you will still be able to carry coverage under a working spouse.

Self-Employed: Does It Matter? Many years ago, a client turning 65 who was self-employed and was not covered under an employer’s group health insurance waited to enroll in Medicare Part B. He received a 10 percent penalty for each year that he was not enrolled, due to not enrolling in Part B at the right time. His penalty was 20 percent penalty (2 years, 65 and 66) every month for as long as he is on Medicare. Essentially, he will be paying that penalty for the rest of his life.

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