There
are a few factors at play that you need to be aware of
by Phil Moeller | May 9, 2019
The question of
whether or not you should elect to enroll in Medicare at 65 could become a
costly one if you don’t choose the right answer.
In this week’s
column, Phil Moeller, the author of Get What’s Yours for Medicare: Maximize Your Coverage, Minimize Your
Costs and co-author of the updated edition of How to Get What’s Yours: The Revised
Secrets to Maxing Out Your Social Security, offers advice on
this topic.
Got a question of
your own about Medicare or
Social Security? Send it to askphil@considerable.com.
Medicare eligibility
and signup periods
Question: I am 72 years
old. I work for the City of Philadelphia and plan to work until 75. I have been
told I would not be required to take Part B of Medicare (I only have A) until I
am retired for six months, even though my city benefits are for five years.
It was suggested that
it would be better not to wait the six months because if I had a catastrophic
illness, my city insurance would only pay 80% of my covered expenses, leaving
me with a huge bill. If Part B was in place, it would be my primary insurance
and the city’s insurance would be secondary.
However, I also have
been told by others that I should have signed up at 65, and I will be penalized
from 65 until now. Is this true?
If so, both my
husband and I have been fed extremely poor information. Please let me know what
I am to do and who is giving me the proper information.
Phil Moeller: If you are
actively employed and have employer group health insurance, you did not need to
get Medicare when you turned 65 and do not need it now, although you could if you
thought it would improve upon your existing coverage and was worth the price.
If you didn’t get
Medicare at 65, you would not be later charged with late-enrollment penalties,
so long as your employer signed this form indicating
you’ve had insurance coverage. The form would be presented when you later
needed Medicare.
There is an
eight-month special enrollment period that begins on the date a person aged 65
or older loses employer coverage. However, your intuition is correct – you
should apply for Medicare early enough so that it will have taken effect by the
time your employer coverage ends.
It sounds like you
will have retiree coverage and Medicare for five years after you stop working.
It would be a good idea for you to find out exactly what your retiree plan
covers and how it and Medicare would coordinate payment of any covered
insurance claims.
People often are
reluctant to talk with their insurers, but I’ve found this is usually the best
way to get helpful information. My advice is necessarily general in nature as
there are lots of different employer plans and I don’t know the details of your
plan.
Question: My husband and
I will both turn 65 later this year. We are retired and currently on COBRA from
his employer. His employer says I should delay signing up for Medicare for one
month.
I am reading about
all these penalties if you don’t sign up when you become eligible. Should I
just sign up in August and pay the COBRA premium as usual?
His employer says
they will give me a letter and just wait until September when my husband will
sign up. I am concerned about that as the employer is in a different state and
may not understand the rules fully.
Phil Moeller: You should not
have to worry about penalties. There is a seven-month initial eligibility
period for Medicare, and the start date of your coverage depends on when during this
period you enroll.
I always tell people
with COBRA that their main concern should not be penalties but making sure they
do not have an unintentional lapse in primary health coverage.
I always tell people
with COBRA that their main concern should not be penalties but making sure they
do not have an unintentional lapse in primary health coverage.
Your COBRA insurer,
for example, may not continue to provide primary coverage when you turn 65 and
would expect Medicare to become your primary insurer then.
I urge you to speak
with your COBRA insurer to find out if this will be the case.
Survivor benefits
Question: Before he died
last year, my father had 38 of the required 40 quarters of work credits needed
to qualify for Social Security benefits. Does my mother have a claim to a
portion of my father’s partial Social Security entitlement?
If not, can she
contribute the two “missing” quarters from her work record to receive the
appropriate beneficiary benefit for a widow?
Phil Moeller: If your father died
after reaching age 62, there is no basis for your mother receiving a survivor
benefit, and the rules do not permit another person to contribute credits to
his account.
If he died at age 60
or younger, she would qualify for benefits because the agency would adjust the
hours needed.
Thirty-eight quarters
of so-called covered earnings would be enough to qualify for someone who died
two years before reaching the earliest age at which benefits normally are
available.
Question: My father passed
at the age of 69, so unfortunately it seems that being two credits short of the
requirement will be our downfall.
Our case is unique
because my father worked in the United States for many years under a green card
visa prior to becoming a U.S. citizen. I understand that green card holders do
not pay Social Security taxes so those quarters of employment under the green
card visa did not contribute towards the 40-quarter minimum requirement.
Phil Moeller: I am sorry that
your mother apparently does not qualify for a survivor benefit. To make sure,
she should ask Social Security for access to his
formal earnings record.
Question: I just got done
reading “Get What’s Yours for Medicare.” It’s a great source of information
and, while Medicare is still confusing, it’s less confusing to me now!
My wife is 73, and I
am 64. I will be turning 65 soon. My wife has been taking Social Security
benefits since she was 62. I would like to apply for my Social Security
benefits when I turn 66.
My wife was married
before to a man around 35 years ago who has since died. She was married to him
for about 12 years.
The question is, can
she apply for survivor benefits from his account?
Another question is
whether her benefit will go up when I take Social Security at age 66, and she
becomes eligible for a spousal benefit based on my work record. What is the
better scenario?
Phil Moeller: If she
remarried you when she was age 60 or later, she is eligible for an ex-spousal
survivor benefit. If she was younger than this when you married, she is not
eligible.
When you apply for
your benefit at age 66, she will be eligible for a spousal benefit. If it’s
larger than her survivor benefit, she’d receive an additional payment equal to
the difference. If not, her benefit would stay the same.
Question: I’m planning to
collect Social Security at age 66 this fall. My wife is nine years younger. Can
she collect a spousal benefit? I’m already retired, and she is the breadwinner.
We want “What’s Ours!” Thanks for the help.
Phil Moeller: If your wife is
the higher earner in your household, she should wait as long as possible to
claim her Social Security. She won’t even be eligible to file until she is 62,
and benefits rise 7 percent to 8 percent a year between 62 and age 70.
If your wife were to
file for a spousal benefit when she turned 62, she also would trigger her own
retirement filing at that time. Under new rules passed in late 2015, there is
no way she can file for a spousal benefit while deferring her own retirement
filing.
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