Will You be Retiring in 2025?

If you plan to retire the same time you turn 65, you will apply for Medicare during your Initial Enrollment Period. This window is a seven-month window that begins 3 months before your 65th birthday month and ends three months after. Your Medicare benefits will start on the 1st of your 65th birthday month when you apply three months before. However, your coverage can be delayed when you apply 3 months after your birthday month. This is important to know since you could have a gap in coverage if you do not plan properly.

Most employers will cover you until the end of the month when you retire. However, this is not across the board. You can contact your HR department to know exactly when your insurance will end.

What to do If You Retire Before 65

If you begin your retirement before 65 and you will not have any form of insurance from your previous employer, you will want to consider looking into ACA plans. You can look at these plans through healthcare.gov and enroll in a plan you find to be most cost-effective for you.

Since ACA plans are not creditable for Medicare, you will want to transition to Medicare at 65. Therefore, you will sign up for Medicare during your Initial Enrollment Period window and see which additional plan option best fits your needs. Once you have your Medicare coverage set in place, you can contact your ACA plan and cancel the plan. You can time it so that your ACA plan will end on the last day of the month and Medicare will begin on the 1st of the following month.

Are You Past 65 and Retiring in 2025?

Suppose you are past your Initial Enrollment Period window, and you or your spouse are actively working for a large employer. In that case, you will have a Special Enrollment Period (SEP) window to apply for Medicare when you lose that employer health plan. You will have 8-months to enroll in Medicare once you lose coverage or employment before accruing a late enrollment penalty.

However, you will want to plan if you’d like Medicare to begin the month after you lose coverage. We recommend applying for Medicare about two months before you need it to be effective in this situation. It can take several weeks for Social Security to process your documents. You will need to submit CMS form 40B and CMS form L564 when you apply due to losing creditable coverage.When you actively work for a small employer past 65, you will not qualify for the SEP. Small employer insurance is not creditable for Medicare and therefore, you will want to apply for Medicare during your IEP to avoid the late enrollment penalty. Your small employer insurance would be secondary to Medicare.

Retiree Coverage

If you are offered Cobra or retiree coverage when you retire, you will likely want Medicare to start as soon as you switch to Cobra or the retiree plan. Those options will be secondary to Medicare Part A and Part B. There is a chance they will not pay the remaining balance for services unless you have Parts A and B active. You can confirm how your retiree coverage will work with Medicare by contacting your HR department or Medicare directly.

Post-Employer Coverage to Consider with Medicare

If you are offered a retiree plan, you can compare that plan with the plans offered by private insurance companies such as a Medicare Advantage or Medicare Supplement plan. You may find those plans to be more cost-effective than your retiree plan.

You will want to consider enrolling in an additional plan because Medicare does not cover all your hospital and medical services in full. You can be stuck paying large deductibles and 20% coinsurance for your services with no cap on your costs.