Dear Liz: I have a high-deductible insurance plan from my employer and I contribute to a Health Savings Account. I understand people on Medicare can’t contribute to an HSA. If I’m still working at full retirement age, can I start my Social Security benefit but avoid enrolling in Medicare?
Answer: No. Once you start Social Security, you’re automatically enrolled in Medicare if you’re 65 or older.
If you delay Social Security and don’t plan to enroll in Medicare at 65, you’ll want to make sure your employer-provided health insurance will allow you to avoid penalties for late enrollment. These penalties, which are permanent, result in higher premiums for Part B (which covers doctor visits) and Part D (which covers prescriptions). You can avoid those penalties if your employer has 20 or more employees and your health insurance provides at least as much coverage as Medicare. Check with your company’s human resources department.
I’m in the same situation. I enrolled in Medicare to avoid penalties but then found out that it could prevent my HSA contributions. I sent in a form to reverse my Medicare enrollment but it was never acknowledged. I am fully covered under my employer insurance and so far no one has noticed that I’m technically enrolled in Medicare. Do I need to try again to unenroll? I’m probably working at least 2 more years and don’t want to lose the HSA benefit.
If you haven’t already, create a MySocialSecurity account and click on “My Benefit Verification Letter.” That will show whether you’re enrolled in Medicare.
I would suggest you try again to disenroll in part B. You’re probably paying part B premiums that may not be worth it if you’re covered through your employment. Contact Social Security to disenroll.
From the Social Security website:
“You can voluntarily terminate your Medicare Part B (Medical Insurance). However, you may need to have a personal interview with us to review the risks of dropping coverage and for assistance with your request. To find out more about how to terminate Medicare Part B or to schedule a personal interview, contact us at 1-800-772-1213 (TTY: 1-800-325-0778) or visit your nearest Social Security office.”
You can avoid the late enrollment penalty for both parts B and D as long as you’re fully covered by a qualifying (benefits at least as good as medicare) employer provided plan based on active enrollment (a plan provided by your employer when you’re retired doesn’t avoid the late enrollment penalty).
Make sure to enroll in part B just before that coverage ends to avoid a gap in coverage, and also in part D if you choose not to enroll in a Medicare Advantage plan.
Your employer-provided insurer will probably notice that you’re enrolled in Medicare, and reject claims for services covered by your Medicare coverage.
The original letter writer actually could start their Social Security benefit and avoid enrolling in Medicare if they don’t start their Social Security benefit until after they turn 65, which would probably be the case if they wait until full retirement age to start collecting.
Social Security will automatically enroll beneficiaries in Medicare parts A and B if they are collecting benefits when they turn 65, but if they don’t start collecting until after that, they will not be enrolled until they enroll themselves.