Why retiree coverage doesn't replace Part B
Medicare draws a line between coverage from a current job and everything else. Medicare's enrollment booklet says COBRA and retiree health plans aren't considered coverage based on current employment, so you're not eligible for a Special Enrollment Period when that coverage ends. Three things follow:
- Medicare pays first. Once you're eligible, Medicare is the primary payer and your retiree plan pays second.
- The plan may not pay without Part B. Medicare.gov warns that retiree coverage might not pay your medical costs during any period when you were eligible for Medicare but didn't sign up.
- Waiting costs more. The Part B late penalty is 10% of the standard premium for each full 12 months you could have had Part B, for as long as you have it. You'd also have to wait for the General Enrollment Period (January 1 to March 31).
Oregon public retiree plans
| Plan | Rule |
|---|---|
| PERS Health Insurance Program (PHIP) | All Medicare-eligible members and dependents must have and keep Part A and Part B. |
| PERS RHIA subsidy | Paid only to retirees enrolled in Parts A and B. |
| PEBB retiree plans | End the last day of the month before Medicare eligibility. |
| OEBB early retiree plans | Medical and vision end the last day of the month before Medicare starts. |
Private employer and union retiree plans set their own rules, but most are built to sit on top of Parts A and B. Ask your benefits administrator in writing how the plan works with Medicare.
What to do
- Sign up during your Initial Enrollment Period. It runs from three months before the month you turn 65 to three months after. Apply at SSA.gov or 1-800-772-1213.
- Tell your retiree plan your Medicare dates. The plan coordinates its payments with Medicare.
- Check the drug coverage notice. If the plan's drug coverage is creditable, you don't need a separate Part D plan.
- Compare. Some retirees find a Medigap policy or Medicare Advantage plan fits better than the retiree plan. You can request a call from a licensed insurance agent.
More in Retiring after 65 in Oregon.
Related questions
What is PHIP for Medicare retirees?
PERS retiree coverage.
What happens to my PEBB coverage at 65?
The state employee rule.
What happens to my OEBB coverage?
For school retirees.
Do I need Part B if I'm still working?
When you can delay.
Sources
- Medicare.gov — Enrolling in Medicare Part A and Part B (publication 11036)
- Medicare.gov — Which insurance pays first
- Medicare.gov — Avoid late enrollment penalties
- PERS Health Insurance Program — Medicare enrollment
More questions in this guide
- How does the PERS RHIA subsidy work with Medicare?
- What happens to my OEBB coverage when I get Medicare?
- What happens to my PEBB coverage when I turn 65?
- What is the PERS Health Insurance Program (PHIP) for Medicare retirees?
Part of the guide: PEBB retirees and Medicare in Oregon · All questions
Frequently asked questions
What if my retiree plan says Part B is optional?
Get that in writing and ask how the plan pays if you don't have Part B. Even then, you'd face a late penalty and a wait for coverage if you want Part B later.
Is COBRA the same as retiree coverage?
For Part B, they're treated alike. Neither is coverage from current employment, so neither lets you delay Part B without risking a penalty.
Does retiree drug coverage count for Part D?
It may. Your plan must tell you each year whether its drug coverage is creditable. If it is, you can delay Part D without a penalty.
I'm still working past 65. Is that different?
Yes. Coverage from your own or your spouse's current job at an employer with 20 or more employees lets you delay Part B and sign up within eight months after the job or coverage ends.
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