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Info from SHIIP: Things You Must Know Before Enrolling in Medicare

June 16, 2017

MARSHALLTOWN—The Iowa Insurance Division’s Senior Health Insurance Information Program (SHIIP) talks to thousands of Iowans, including those in Marshalltown, every year about enrolling in Medicare.

“There is a lot of information for Iowans to digest when they are deciding whether to enroll in Medicare,” Kris Gross, director of SHIIP said. “The top two misconceptions we hear from Iowans are that there is a requirement to sign up for Medicare Part A at age 65 and to enroll in Medicare Part B even if the person is continuing to work and has employer health insurance. Neither is true.”

Correct information regarding two common misconceptions that SHIIP hears from Iowans are below.

First Misconception: You’re required to sign up for Medicare Part A at age 65.

This is not true. If you or your spouse continues to work and have insurance from this employment, you are not required to enroll in Medicare. Medicare Part A is free for most people because of their FICA contributions while employed. For this reason, people typically sign up for Part A once they become eligible.

However, since Health Savings Accounts (HSAs)—which have high deductible health plans—have become more popular as an employee health benefit, automatically signing up for Part A needs to be reconsidered and may not be in your best interest.

“If you are enrolled in a health savings account and work past 65, you may want to delay Part A,” said Sue Turbiville, a UnityPoint Health – Marshalltown volunteer counselor for Senior Health Insurance Information Program. “Understand that when you enroll in Part A, social security will backdate your benefit up to six months. You should carefully plan when to stop contributions to avoid a tax penalty—so stop contributing to your HSA the month to which your Part A is back-dated.”

Moreover, if you continue to work and enroll in Medicare Part A and/or B, you and your employer can no longer make contributions to the HSA. So you can use the money in your HSA, but you cannot make new contributions.

Even if your current employer does not offer a HSA, delaying Part A keeps this option open for potential future employment. Keep in mind, those entitled to free Part A will automatically be enrolled once you start receiving your Social Security benefit.

Second Misconception: I need to enroll in Medicare Part B even if I continue to work and have employer health insurance.

False. A person who is actively employed with health insurance from that employer can delay enrolling in Medicare Part B without a penalty until they quit working—no matter the employer size. Large employers must pay primary (first), while the person is working and Medicare pays secondary. Small employers do not have to pay primary.

Workers are often told the small employer insurance will continue to cover them, not understanding that the language in their employer health insurance may require they enroll in Medicare.

“An employer with a group of 20 or fewer employees isn’t required to offer health insurance coverage to employees or spouses over the age of 65,” said Turbiville. “The employer may do so, but that doesn’t mean they have to.”

If insurance doesn’t cover those over 65, the policy will pay secondary to Medicare—even if they haven’t enrolled.  It is very important to talk to the insurance company providing your employer coverage to verify if Medicare enrollment is necessary, because the plan may only pay after Medicare pays.

The Numbers

571,956 Iowans were Medicare beneficiaries in 2015, according the Centers for Medicare and Medicaid Services, CMS Program Statistics. This is about 1,000 more individuals than in 2014. There were 54,095,565 beneficiaries nationwide.

“Understanding the Medicaid process is very important,” Turbiville said. “Oftentimes you find community members who find this process confusing, and that is why we are always very happy to help.”

Who to call

Iowans with questions about Medicare may call the local UnityPoint Health – Marshalltown SHIIP office, which can be reached at 641-754-5399. A representative will return your call and make an appointment with a trained SHIIP counselor who can help a Medicare eligible individual decide what type of coverage is best for his or her situation.  The state SHIIP phone number is 800-351-4664, or you can visit therightcalliowa.gov.

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