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Losing Employer Coverage
Medicare Special Enrollment: Leaving Your Group Coverage
If you’re employed and approaching the age of 65, you should contact your human resources department and find out how your company’s group health insurance works with Medicare. Follow their guidance on what to do.
It’s likely that they’ll instruct you to go ahead and sign up for Medicare Part A (hospitalization) since there are no premiums. You’ve earned this benefit from the FICA taxes you paid over the course of your working life.
Your group coverage will most likely cover medical costs so you won’t necessarily have to sign up for Medicare Part B, which has monthly premiums.
When you retire or otherwise leave your group coverage, you’ll be eligible for a Special Enrollment Period where you can sign up for Medicare Part A and Part B if you haven’t already done so. This period lasts for 8 months beginning the month after your group coverage ends.
You may be offered to extend your group coverage through COBRA. It will most likely be at a higher cost than your Medicare Part B premiums would be. You must carefully weigh the costs and benefits of each option. If you decide to go with COBRA, it will not extend your Medicare Special Enrollment Period. If you fail to sign up for Medicare Part B during that 8-month period, you may have to pay a penalty with your Part B premiums for the rest of your life. That could be a very costly mistake!