Achieving Medicare eligibility is a major milestone, and for most people, it raises lots of questions. The following information and resources can help you understand your choices.
When to enroll in Medicare
You’re first eligible to enroll in Medicare during your Initial Enrollment Period (IEP), which begins three months before the month of your 65th birthday and ends three months after the month of your 65th birthday.
If you participate in an employer active-employee medical plan (not COBRA), you can enroll in Medicare without a penalty when you retire.
Medicare Part A
If you apply for age-based Social Security benefits before or at age 65, you will be enrolled automatically at age 65 in Medicare Part A, which is premium-free hospital insurance that covers inpatient stays and care in a skilled nursing facility.
You can generally avoid automatic enrollment in Medicare Part A by not applying for Social Security benefits to begin at or prior to age 65.
Note that you may be enrolled in Medicare automatically because of other rules that apply in your state. To check your Medicare enrollment status and learn about opt-out options, visit medicare.gov or contact your local Social Security Administration office.
Medicare Part B
Medicare Part B is medical insurance that covers doctor’s visits, lab work, vaccinations and other outpatient treatments. During your IEP, you’ll need to enroll in or decline Part B.
If you are covered by an employer medical plan (not COBRA), you can decline Part B coverage.
Unlike Medicare Part A, you’ll pay a premium for Medicare Part B.
When you enroll in Medicare Part B, you may need to complete Form CMS L564, which includes medical coverage and employment information. You can submit the form to the Adobe Benefits Support Team to complete the employer section.
Penalty-free special enrollment period
If you are covered by an active-employee Adobe medical plan (not COBRA), you can enroll in Medicare without a penalty for up to eight months after you retire.
The same applies for your spouse if you cover them as a dependent on your Adobe medical plan. Your spouse has up to eight months after your employer coverage ends to enroll in Medicare Parts A and B without a penalty.
There are two rules to know about this eight-month special enrollment period:
- If you retire within your IEP, you will not be eligible for this eight-month special enrollment period when you retire.
- COBRA coverage does not count as employer coverage, so the eight months begin when you leave Adobe, not when your COBRA coverage ends.
Medicare and your Adobe medical plan
If you enroll in Medicare while employed by Adobe and keep an Adobe medical plan, your Adobe plan remains the primary plan that processes and pays your health care claims. Medicare would be the secondary payer.
Enrolling in Medicare is a life event that will allow you to drop or change medical coverage for yourself and/or your dependents. Visit the Adobe benefits enrollment site to change your Adobe medical plan.
Contact CareCounsel health care advocates (833-605-6941) to discuss the pros and cons of enrolling in Medicare, maintaining dual coverage or discontinuing your Adobe coverage.
Medicare and your HSA
Enrollment in any part of Medicare will affect your eligibility to contribute to a Health Savings Account (HSA). When your Medicare coverage takes effect, you will not be eligible to contribute to an HSA or receive HSA contributions from Adobe. To avoid excess HSA contributions, you should be aware of these rules:
- You can keep your Adobe medical plan—but without an HSA—after you enroll in Medicare. Visit the Adobe benefits enrollment site to change to the same medical plan without an HSA. If you need help, contact the Adobe Benefits Support Team.
- The amount of your allowable income tax deduction for HSA contributions will be prorated for the year you enroll in Medicare. For example, if your Medicare coverage starts in June, your IRS HSA contribution limit for the year will be 5/12 of the full-year amount, for the time (January through May) when you were not covered by Medicare. Contact HealthEquity with questions about proration and IRS rules.
- When you apply for Social Security benefits, you will be enrolled automatically in Medicare Part A, and that coverage will be retroactive for up to six months before your Social Security payments start (but not before age 65). To avoid a tax penalty, you might consider stopping contributions to your HSA six months before you apply for Medicare. Contact the Adobe Benefits Support Team to adjust your HSA payroll contributions.
- Your spouse’s Medicare enrollment does not affect your HSA eligibility. If you have medical coverage for yourself and your spouse at Adobe, you can continue to contribute the full family amount to your HSA as long as you are not enrolled in Medicare, even if your spouse is already enrolled in Medicare.
After you retire, you’ll be glad you saved money in an HSA before you enrolled in Medicare. You can use your HSA tax-free to pay for Medicare premiums and any eligible out-of-pocket medical expenses.
Medicare and COBRA
COBRA is a temporary extension of the health insurance you had while working and for which you pay the full premiums. Here are some important facts to know about Medicare and COBRA:
- Enrolling in Medicare after electing COBRA will result in the termination of your COBRA coverage. COBRA coverage for your spouse and dependent children may be extended for up to 36 months.
- Enrolling in Medicare Part A or Part B before you elect COBRA will enable you to have both COBRA and Medicare. This is true even if your Part A benefits begin before you elect COBRA but you don’t sign up for Part B until later.
- COBRA coverage will always be secondary to Medicare unless you have end-stage renal disease. Medicare will be your primary insurance responsible for paying the majority of your health care costs. In fact, your COBRA benefits will pay as if secondary to Medicare, even if you are not enrolled in Medicare, so it’s a good idea not to delay enrolling in Medicare Parts A and B.
- COBRA does not count as employer coverage, so if you have not already enrolled in Medicare, your eight-month, penalty-free Medicare special enrollment period begins when you leave Adobe, not when your COBRA coverage ends. If you retire within your IEP, you will not be eligible for this eight-month special enrollment period when you retire.
Learn more and get help
Adobe has partnered with CareCounsel health care advocates (833-605-6941) to provide Medicare advice at no cost to you. They know Adobe’s medical plans and are knowledgeable about Medicare and HSAs, so they’re an excellent resource to help you make the best decisions for your situation. You may want to check out their informative Medicare video series.