According to the Bureau of Labor Statistics, over 10 million seniors over 65 were in the workforce in 2020.
If you aren’t aware, 65 years old is the age you qualify for Medicare in America.
But how does Medicare work for the self-employed or those still actively working?
Keep reading to find out, and be sure to visit here to learn more about supplemental insurance: boomerbenefits.com/medicare-supplemental-insurance.
What is Medicare?
Medicare is health insurance for seniors 65 years and older and others who qualify earlier due to disability.
There are two parts of Medicare:
Part A and Part B. Medicare Part A covers inpatient hospital care, your room and board, home health care, skilled nursing, and hospice.
Medicare Part B covers your outpatient services. For example, Part B covers doctor visits, ambulance rides, durable medical equipment, select vaccinations, and more.
When you have Medicare Part A and Part B, you can visit any doctor in the United States that accepts Medicare.
You will have out-of-pocket costs for many of your Medicare services, but if you are actively working and covered by employer insurance, you may have secondary insurance.
Large employer insurance vs. small employer insurance
If you are self-employed and eligible for Medicare, you will likely need to enroll in Medicare during your Initial Enrollment Period (IEP).
Those self-employed without creditable insurance or have less than 20 employees must enroll in Medicare during their IEP to avoid late enrollment penalties.
When you enroll in Medicare, you can stay on your small employer insurance, but Medicare is primary, and the employer plan will pay as secondary.
Now, if you or your spouse are actively working for a large employer with 20 or more employees and you are covered by their group health insurance plan, you can delay all parts of Medicare until you or your spouse retire.
However, you do have the option to enroll in Medicare for secondary insurance. The large employer insurance will pay as primary, and Medicare will pick up the secondary charges.
Initial Enrollment Period
Those self-employed without creditable insurance will need to enroll in Medicare during their IEP.
Everyone has a different IEP, as it is based around your individual birthday month.
The IEP begins three months before your 65th birthday month and ends three months after your birthday month.
For example, if you turn 65 on October 23, your IEP would begin on July 1 and end on January 31.
With that said, if your birthday falls on the first of the month, such as October 1, your IEP will begin one month earlier. For example, in this case, your IEP would start on June 1 and end on December 31.
You will apply for Medicare Part A and Part B during this time through the Social Security office. You can apply in person, online, or over the phone.
Most self-employed seniors don’t have secondary insurance, so they seek a Medigap (Medicare Supplement) or Medicare Advantage plan for cost-sharing help. Private insurance companies and Medicare brokers sell these types of plans.
A Medigap plan pays secondary to Original Medicare, as it helps cover the “gaps” in Medicare, such as deductibles and copays.
You can visit any doctor in the U.S. and use your Medigap plan as long as the doctor accepts Medicare.
Medicare Advantage plans work entirely differently than Medigap plans.
When you enroll in an Advantage plan, you will receive your Part A and Part B benefits through the insurance carrier.
The carrier will set up a network of doctors and pharmacies you can visit, and they will set your cost-sharing amounts for approved services.
Being self-employed has many perks, but if you aren’t covered by large, creditable insurance, you will want to sign up for Medicare during your Initial Enrollment Period.
If you miss your IEP, you will be charged with life-long late enrollment penalties.
But you don’t have to navigate the Medicare maze alone! Contact a reputable Medicare broker for free Medicare help.