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Over Age 65: The role of Medicare and/or active employee insurance

Many employees and physicians work past the age of 65, and are eligible for BOTH Medicare and Starling insurance.

You will need to make your own decision but there are a few factors to consider.  In general:

  • If you continue your Starling insurance it will be the primary coverage, and Medicare, if also elected, will be the secondary coverage.
  • If you have dependents insured on your Starling insurance, you will need to continue your insurance in order to continue their coverage.
  • Please note that there is an IRS rule that an active employee cannot contribute to an HSA Plan if enrolled in Medicare Part A or Part B, but an employee can still enroll in our plan that has the HSA, but cannot contribute.

Part A (Hospital insurance) – Part A is free, and enrollment seems obvious.  However, if you are continuing your active Starling insurance and have the High Deductible Plan with HSA Benefit, you may want to delay enrolling in Part A because IRS rules say that you can’t contribute to an HSA if you’re enrolled in Medicare Part A and/or B.  There is no penalty for delaying, and when your employment ends you’re entitled to a special enrollment period to sign up for Medicare. 

  • An exception is that if you are accepting Social Security benefits, you cannot decline Medicare Part A.
  • If you’re entitled to Medicare because you signed up for Part A at age 65 or later – but have not yet applied for Social Security retirement benefits, you can withdraw your application for Part A. (To do so, contact Social Security Administration at 1-800-772-1213) There are no penalties or repercussions and you are free to reapply for Part A at a future date.
  • Keep in mind Part A pays for hospital inpatient care, hospice care, skilled nursing care and home health care only. It does not cover doctor visits, outpatient care, chemotherapy, ambulance, ambulatory surgical care, preventive screenings, and medical equipment. Part A also has a $1,316 deductible and variable coinsurance based on length of stay in the hospital or other covered facilities. Your Starling coverage includes all of these services with an $1,875 deductible after employer funding. 

Part B (Medical insurance) – Part B is optional, and as noted above, you probably will not need to take Part B if you have Starling insurance.  The IRS rule is, if you have health coverage beyond age 65 from an employer for which you or your spouse actively work, and the employer has 20 or more workers, you can delay Part B enrollment without penalty until the active employment ends.  

Part D (Prescription drug coverage) – The Starling plan offers prescription drug coverage that is “creditable”, so if you continue your Starling insurance you don’t need to enroll in a Part D drug plan at age 65. Instead, when your employer coverage ceases, you’ll be entitled to a two-month special enrollment period to sign up with a Part D plan without penalty.

For more information, see the article “Medicare When Working Beyond 65.” or the Medicare reference.