Key Takeaways
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You may be able to delay Medicare Part B if you have qualifying employer coverage, potentially avoiding unnecessary premiums.
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Understanding Special Enrollment Periods (SEPs) and late enrollment penalties is essential to making the right choice.
Understanding Medicare Part B and Employer Coverage
Medicare Part B covers outpatient medical services, such as doctor visits, preventive care, and medical supplies. However, it comes with a monthly premium, which is why some people wonder if they should delay enrollment if they still have employer-sponsored health insurance.
If you or your spouse are actively working and have coverage through an employer with at least 20 employees, you may have the option to delay Medicare Part B without facing penalties. However, if your employer has fewer than 20 employees, Medicare generally becomes the primary payer, meaning you should enroll in Part B when first eligible to avoid coverage gaps and potential penalties.
When You Can Delay Medicare Part B
You may be able to delay Medicare Part B without penalty if:
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You have active employer coverage (not COBRA or retiree benefits).
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Your employer plan meets Medicare’s creditable coverage standards.
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Your employer has 20 or more employees (or 100 for those under 65 on Medicare due to disability).
If these conditions apply, you can delay Part B and enroll later during a Special Enrollment Period (SEP) without incurring a late enrollment penalty.
Special Enrollment Period for Medicare Part B
When you leave your job or lose employer coverage, you qualify for an 8-month Special Enrollment Period to sign up for Medicare Part B without penalties. This period begins the month after your employer coverage ends or when you stop working—whichever comes first.
Risks of Delaying Part B
While delaying Medicare Part B may save money in the short term, there are risks to consider:
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Potential Gaps in Coverage: If employer coverage ends unexpectedly, you may experience a coverage gap if you don’t enroll in Part B right away.
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Late Enrollment Penalties: If you miss your Special Enrollment Period, you may have to wait until the General Enrollment Period (January 1 – March 31) and face a 10% penalty for every 12 months you were without coverage.
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Coordination of Benefits Issues: Some employer plans require Medicare to be the primary payer, meaning they may not cover your medical expenses if you don’t have Part B.
How to Decide Whether to Delay Medicare Part B
To determine whether delaying Medicare Part B is the right decision, ask yourself these questions:
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How large is my employer? If your employer has fewer than 20 employees, enroll in Medicare Part B to avoid coverage issues.
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How good is my employer coverage? Compare the costs and benefits of your employer plan versus Medicare Part B.
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Do I plan to retire soon? If retirement is on the horizon, enrolling in Medicare on time may be a safer option.
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Does my employer require Medicare to be primary? Some employer plans only pay secondary to Medicare, making Part B enrollment necessary.
Enrolling in Medicare Part B After Delaying
If you delay Medicare Part B due to employer coverage, here’s how to enroll when the time comes:
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During a Special Enrollment Period (SEP): You have an 8-month window after losing employer coverage to enroll without penalty.
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Via the Social Security Administration (SSA): You can apply online, by phone, or in person at your local SSA office.
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With Form CMS-L564: Your employer must complete this form to verify you had coverage while delaying Medicare Part B.
The Bottom Line
If you have qualifying employer coverage, delaying Medicare Part B can be a smart financial decision. However, it’s important to understand the rules and potential risks before making your choice. Make sure your employer coverage is sufficient, know your enrollment windows, and avoid costly mistakes that could lead to penalties or gaps in coverage.
