Why Do I Need Medicare Part B If I’m Turning 65 and Have Retiree Benefits?
Good day, Toni,
We saw your article about Medicare Part B enrollment in our local newspaper, but my wife’s and my Medicare enrollment situation is different. We will both turn 65 this year, I in June and Carol in September. I have signed up for Medicare Part A only, and Carol will enroll for Part A soon.
I retired when I turned 63 with fantastic retiree benefits for both my wife and me. Currently, I’m being paid as a 1099 contract worker, so I don’t have health benefits with the company where I am working part-time.
We do not see a need to sign up for Medicare Part B because of our coverage under a retiree employer group health plan. Are we correct in this assumption of us not enrolling in Part B? Neither the HR department nor Medicare can give us a straight answer, so we need guidance.
Please explain what you, as a Medicare consultant, would recommend that we do about applying for Part B with retiree benefits.
Thanks in advance, Toni,
Richard and Carol from Corsicana, TX
Hello Richard and Carol,
Great Medicare question! I would advise you to enroll in Part B NOW because both you and Carol are in your Medicare Initial Enrollment Period (IEP). Not enrolling in Medicare Part B can result in a “Medicare nightmare.”
I did write a Medicare article recently about someone self-employed, working as a “sole proprietor” with individual coverage and not a “contract worker” as you currently are, Richard. But the same rule applies. A contract worker’s status is typically of an independent contractor, who is hired to perform a specific task or project under a contract and is not considered an employee who receives employer benefits.
Medicare recognizes “true” employer and union health plans for someone working full-time for that company if the working employee and their non-working spouse are covered. They may delay Part B without receiving the famous Medicare Part B penalty.
Page 19 of the 2025 Medicare & You handbook states that COBRA and retiree health coverage do NOT count as current employer coverage.
“If you or your spouse (or family member if you have a disability) are still working and you have health coverage through that employer or union, go to page 21 to find out how your coverage works with Medicare. You can also contact the employer or union benefits administrator for information. This
includes federal or state employment and active-duty military service. It might be to your advantage to delay Part B enrollment while you still have health coverage based on your or your spouse’s current employment.
Coverage based on current employment doesn’t include:
- COBRA (or similar continuation coverage after employment ends)
- Retiree coverage
- VA coverage
- Individual health insurance coverage (like through the Health Insurance
Marketplace®) - Former employer coverage you get through severance or a layoff.”
Click HERE to access the 2025 Medicare & You Handbook!
Individual health plans are also not considered employer coverage for those who are self-employed. Richard, since you and Carol are covered by a retiree employer group health plan, I would recommend that you and Carol enroll in Medicare during your IEP.
Richard, NOW is yours and Carol’s “Medicare Initial Enrollment Period (IEP),” which is a 7-month period that begins as you turn 65. You both have 3 months before turning 65, the month you turn 65, and 3 months after to enroll in Parts A and B. Enrolling during your IEP will prevent you and Carol from receiving the Part B 10% penalty for each 12-month period you could have had Part B but failed to enroll.
I advise anyone who contacts the Toni Says Medicare team for a personalized Medicare consultation to enroll in Medicare Parts A and B if you are “not working” for a company with true employer benefits. Not working with qualifying employer insurance benefits is what Medicare looks for when it comes to the famous Medicare Part B penalty.
Readers, enroll in Medicare the correct way when you are turning 65 or after 65 and retiring from your company, because you do not get a second chance. “I didn’t know” is NOT an excuse for Social Security, which is the government agency that enrolls Americans in Medicare and administers the Medicare penalty!
Review your options carefully, because with Medicare, what you don’t know WILL hurt you! Questions? Contact the Toni Says Medicare team at www.tonisays.com for immediate assistance or call (832) 519-8664. Toni’s new Medicare Survival Guide bundle is also available on the Toni Says website!
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Originally published June 30, 2025
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