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Q. I am a 67-year-old military retiree on Tricare for Life. My wife will turn 65 this year and become eligible for Medicare, but will not retire and start collecting Social Security until she turns 66. At the moment, she’s enrolled and covered by her employer’s medical and drug coverage, with Tricare as her second payer. She has three questions:
1. If she does not enroll in Medicare when she first becomes eligible in a few months and instead continues to use her employer’s medical and drug coverage, will she still have Tricare as a second payer as long as she continues her employer coverage?
2. Will she incur any penalties if she does not enroll in Medicare immediately but does so later?
3. When she is no longer employed, can she choose not to enroll in Medicare and instead purchase other qualifying medical insurance at her own expense and still have Tricare as second payer for as long as she lives?
A. If your wife wants to remain covered by her employer plan after she reaches age 65, she is free to do so. Individuals who are still working and covered by an employer plan at age 65 may delay enrollment in Medicare as long as they continue to work and carry employer coverage.
Individuals in this scenario may still enroll in free Part A inpatient hospitalization insurance while they work without enrolling in premium-based Medicare Part B; since Part A is free, there’s no downside to that. For premium-based Part B outpatient insurance, there is no late enrollment penalty as long as the individual enrolls before stopping work or within eight months of the end of work or the end of the employer health coverage, whichever is first.
However, unless and until your wife enrolls in Medicare Part B, she will be shut out of Tricare. Tricare will not act as a second payer to an employer-sponsored group health plan unless the individual is also enrolled in Medicare Part B.
Individuals over 65 are free to enroll in Part B while they continue to work. Of course, that means paying the employer plan’s costs as well as the Medicare Part B premiums, and carrying three layers of coverage likely will amount to being “overinsured” for most people. But some like the feeling of extra coverage. In this scenario, the employer plan would pay first, Medicare second and Tricare Standard last.
Another option for those who continue working past age 65 is to forgo the employer coverage and use Medicare/Tricare for Life only. In that scenario, individuals should check to see if they can suspend their employer plan rather than canceling it outright, which would leave open the option to return to it down the line.
When your wife is no longer employed, she must be enrolled in Medicare Part B in order to use her Tricare for Life benefits. Tricare will not act as second payer for fully retired Medicare-eligible seniors who are not enrolled in Part B, regardless of what other coverage they may have.
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