Working, Medicare and Social Security - When You Need to Sign Up (from WSJ)

How to Navigate Medicare if You're 65 and Working

By KELLY GREENE

I am currently employed full time and have been with the same employer for more than 10 years. My employer pays 100% of my health coverage. I will be 65 in September and know that I must make a decision regarding Medicare as soon as possible. But I don't know if I have to sign up. I have no plans to retire. Do I sign up for Part A or Part B? I don't know how that interacts with my present health coverage.
—Angie Bradford, Charleston, S.C.

I am continuing to work and have a health savings account. I will turn 65 in September. I am told I will incur a penalty if I don't enroll in Medicare Part A. But if I do enroll in Part A, I can no longer contribute to my HSA. Do you know an answer to this?
—Peggy Boehm, Indianapolis

As long as you are still insured through your job or your spouse's, there is no penalty for delaying Medicare coverage when you become eligible at age 65. But you need to make sure your coverage will stay the same when you turn 65.

Medicare has four parts: Part A, which mainly covers hospital care; Part B, covering outpatient care including doctor visits; Part D for drug coverage; and supplemental policies that generally pay uncovered bills.
There isn't a charge for signing up for Part A, as long as you have worked for at least 10 years in Medicare-covered employment, so in most cases you should take it. (More on that below.)
If you enroll in Social Security, you generally are enrolled in Part A automatically when you turn 65. But if you aren't collecting Social Security yet, you need to sign up for Medicare Part A at some point in the window of three months before your 65th birthday through the three months following your birthday. There is enrollment information at socialsecurity.gov. If you sign up for Social Security, you should get a copy of the Medicare handbook, "Medicare & You," in the mail shortly before you turn 65. If you don't sign up for Social Security, you can download the handbook from medicare.gov or request it by calling 800-633-4227.To decide whether to take Part B, which has a monthly premium of at least $96.40 this year, you need to find out how your employer-sponsored coverage works with Medicare. If your employer insurance would become secondary to Medicare, you generally should take Parts A and B. If your employer coverage remains primary, you generally wouldn't need Part B. There isn't a penalty for waiting to sign up for Part B until your employer-sponsored insurance ends. (There is a special enrollment period in that case, described in the Medicare handbook.)
As for Part D, which is drug coverage, you need to find out from your employer whether your coverage is what Medicare considers "creditable." (Such coverage, according to Medicare, "is expected to pay, on average, at least as much as Medicare's standard prescription drug coverage.") If your coverage is creditable, there isn't a penalty for waiting to sign up until after your coverage ends (as long as you meet Medicare's deadlines for doing so).
Health savings accounts, the subject of the second question above, let people with high-deductible health-insurance plans save pretax money to cover medical costs, invest the assets in the meantime, and pay no taxes on withdrawals as long as the money is used for qualified medical expenses. It is true that if you sign up for Medicare, you can no longer contribute, says JoAnn Laing, head of Information Strategies Inc. in Ridgefield, N.J., which runs HSAfinder.com.
So, if you want to continue contributing to an HSA after age 65, you shouldn't sign up for Medicare Part A (or any other parts). You are allowed to delay enrollment in Part A if you also delay Social Security, Ms. Laing says.
Make sure your employer will let you keep your plan. Group health plans of employers with at least 20 workers have to do so, Ms. Laing says.

Write to Kelly Greene at kelly.greene@wsj.com