Most of you looking forward to eventual retirement are aware that you can sign up for Medicare at age 65. But did you know that enrolling in Medicare is actually a requirement? And if you don’t sign up, you could be penalized, depending on the circumstances?

A quick read of the rules would lead you to believe that everyone is required to enroll in Medicare when they turn 65, but that’s not entirely true. There is one exception to this rule: If you’re still covered by an employer’s group healthcare plan, either through your own employment or your spouse’s, and that employer has more than 20 employees, then you don’t have to enroll yet.

In that case, you have creditable coverage, and you won’t have to enroll in Medicare until you separate from the employer or otherwise no longer have that healthcare plan.  However, you should note that Medicare does not consider COBRA creditable coverage.  If you are over 65 and losing employer group coverage, you must enroll into Medicare withing 60 days of losing coverage.

On the other hand, you have the option to enroll and use Medicare as secondary coverage. This option might benefit you, depending upon your usual out-of-pocket expenses and how they stack up to Medicare premiums and coverage.

If you’re still employed, but the employer has fewer than 20 employees, then you do have to sign up for a Medicare plan.

And of course, everyone else – both retirees or those still working who lack a healthcare plan – must enroll in Medicare at age 65.

So, what’s the “penalty” for failing to enroll on time? Technically, the penalty doesn’t impact you until you do enroll at some later date. But at that point, you will be charged a 10 percent penalty, added to your regular premiums, for each year that you delayed enrollment. If you delay by several years, you’re looking at significantly higher premiums for the rest of your life.

Before making a decision about Medicare enrollment, call us to speak with one of our insurance brokers. We can help you determine if Medicare enrollment is required in your case. If you’re not required to enroll, we can help you decide if utilizing Medicare as secondary insurance might be a good idea for you. And if you are required to enroll, we can help you choose a plan and fulfill that requirement in a timely manner, so that you avoid the possibility of a penalty.