If an individual is still employed and has health insurance through his or her employer, is it a requirement that the individual also enroll in Medicare?

If an individual is Medicare eligible, still working and covered by their employer’s HDHP, they may consider postponing their Medicare enrollment. They should get a letter in the mail from Medicare prior to their 65th birthday explaining the rules to avoid late entrance penalties. The individual should also check with their employer to make sure their HDHP coverage is considered “creditable” for Medicare Part D (prescription coverage).
Medicare requires creditable prescription coverage in order to avoid late enrollment penalties. Even if an individual decides to postpone their Medicare enrollment until after they quit working, if they enroll in Social Security, they will be automatically enrolled in Medicare Part A. The law does not allow an individual to enroll in Social Security and opt out of Medicare Part A. So, if an individual decides to postpone Medicare, they would also need to postpone Social Security benefits in order to be eligible for HSA contributions. An individual’s eligibility to contribute to an HSA is not affected if he or she chooses not to enroll in Medicare but their spouse chooses to enroll in Medicare. Both the employee and spouse’s qualified expenses can still be paid from the HSA, with the exception of the spouse’s Medicare premiums. No Medicare premiums can be paid from the employee’s HSA if the employee is not enrolled in Medicare. Individuals should seek advice from their financial adviser and Social Security (socialsecurity.gov‡ or 800.772.1213) to determine if postponing Social Security/Medicare benefits is the right option for them.

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