Medicare is the federal health insurance program for people who have turned 65. It is also for people within other extenuating circumstances such as younger people with certain disabilities and those with failing kidneys.
When applying for medicare there are a few different rules if you owned or worked for a small business that you need to know.
- Financial advisers who work with owners or employees of small businesses that employ fewer than 20 workers should be aware of a special rule that affects these clients. They must enroll in Medicare when they turn 65 or face lifelong penalties.
- Normally, workers age 65 and older can delay enrolling in Medicare, the government-run health insurance program for people 65 and older and certain people with disabilities, if they continue to have group health insurance through their employer or through their spouse’s employer.
- If the employer has 20 or more employees, the group health plan generally pays first, according to Medicare.gov. But the rules are different for small businesses and the self-employed. In this case, Medicare is the primary payer. If you don’t sign up for Medicare at 65, it will be as if you have no insurance at all. (warns the Medicare Rights Center)
- Medicare Part A, which covers hospitalization, is free to workers and their spouses if the worker paid Social Security and Medicare payroll taxes for at least 10 years. Because there is no monthly premium, most Americans enroll in Medicare A at 65 even if they continue to work. However, once they enroll in Medicare, they can no longer contribute to a Health Savings Account. But they can still use their HSA funds tax-free to pay for out-of-pocket medical expenses.
- Most Americans jump at the opportunity to enroll in Medicare at age 65, but it can be a financial burden for people who continue to work beyond traditional retirement age. Postponing enrolling in Medicare Part B until group health insurance coverage ends can save workers money. This is by eliminating the need to pay for duplicate health insurance.
- Workers who take advantage of their employer’s (or spouse’s employer’s) group health insurance coverage have up to eight months after that coverage ends to sign up for Medicare Parts A and B penalty free. But if they want to enroll in an all-inclusive Medicare Advantage plan, also known as Medicare C, or a Medicare D prescription drug plan, they have only 63 days after the loss of employer healthcare coverage to enroll penalty free.
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