Healthcare Educators


Buying Medicare When My Spouse Has Insurance: Key Considerations

by | Sep 17, 2019

When you turn 65, you become eligible for Medicare. While many people enroll right away to get their benefits and to avoid late penalties, some people have other insurance options. If your spouse has insurance through work, you may be wondering whether you should stay on your spouse’s plan or enroll in Medicare. Consider these issues while making your decision.

Active Employment

If your spouse has group health coverage through a job that covers both of you, you may wish to keep it after turning 65. According to Medicare, if employers with 20 or more employees offer health benefits to employees and spouses, they must offer the same benefits to employees and spouses aged 65 and older. This means you do not have to worry about losing your employee benefits.

But there’s another issue to consider: whether you’ll face late penalties when you finally do enroll in Medicare. These penalties can be significant. For example, your Part B premium can increase 10 percent for every 12 months you delayed enrollment. You may also face a gap in coverage.

The good news is that you may qualify for penalty-free late enrollment. As long as the following are true, you should be able to delay enrollment in Medicare without a penalty.

  • Your spouse is actively employed.
  • The company has 20 or more employees.
  • The company offer a group health plan.

The month after employment ends, or the month after the coverage through active employment ends, you will qualify for a Special Enrollment Period in Medicare. The Special Enrollment Period lasts for eight months.

Retiree Plans and COBRA

Under Medicare rules, retiree plans and COBRA do not qualify you for penalty-free late enrollment in Medicare. This means that if you delay enrollment in Medicare because you have coverage through your spouse’s retiree or COBRA plan, you may face expensive late penalties when you eventually enroll in Medicare.

Additionally, you may not qualify for a Special Enrollment Period when your COBRA or retiree coverage ends. This means that you will need to wait until the General Enrollment Period to enroll in Medicare, resulting in a coverage gap.

Becoming eligible for Medicare may also impact your retiree coverage. You may be required to enroll in Medicare in order to use your retiree benefits. Contact the plan administrator for details.

Having Two Types of Insurance

In some cases, you may be able to maintain enrollment in Medicare and another health plan.

  • If you have a retiree plan and Medicare, Medicare is generally the first payer.
  • If you have COBRA and enroll in Medicare, COBRA will likely end. If you have Medicare and become eligible for COBRA, you can enroll in both. Medicare is generally the first payer.
  • If you have a group health plan through active employment and Medicare, the group health plan generally pays first. However, if the employer has fewer than 20 employees, Medicare may be the first payer.

Need Medicare Insurance guidance? Contact a PTT Financial agent.