3 things retirees need to know before signing up for Medicare

Millions of older Americans today have health coverage through Medicare. And if you’re getting ready to sign up, you can look forward to the benefits you’re entitled to as part of the program.

But Medicare has a lot of rules, and some are less well known than others. With that in mind, here are three things you should be aware of if your time to sign up for Medicare is approaching.

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1. You may not have to sign up right away

The initial Medicare enrollment window spans seven months. It starts three months before the month you turn 65 and ends three months after that month.

Enrolling in Medicare late could mean you face lifetime surcharges for Part B coverage, so it’s not ideal. But you also don’t want to sign up for Medicare too early — like when you have a fantastic group health plan through your workplace that costs less than Medicare.

You should know that if you are in a group health plan with 20 or more employees, this generally entitles you to a special Medicare enrollment period that begins once your group health coverage ends . So if you’re not ready to sign up for Medicare during the initial enrollment period, you may not have to. And to be clear, if you get a special enrollment period, it means you won’t have to worry about Part B surcharges for missing your original enrollment period.

Another thing you should know is that because Medicare Part A typically doesn’t charge an enrollee premium, it may pay to sign up for Part A yourself, even if you have group health coverage at the time of the initial window registration. In this way, Part A can serve as secondary health insurance.

2. You may not have all services covered

If you have employer health insurance, then you may be used to having all of your medical needs covered, including dental care, eye exams, and new eyeglasses. But you should know that Medicare does not pay for these services. Medicare also won’t pay for hearing aids, which are a fairly common expense for seniors.

It’s important to read more about Medicare to see what is and isn’t covered so you can strategically enroll. One option, for example, is to choose a Medicare Advantage plan instead of Original Medicare. Advantage plans typically offer additional benefits, such as dental and eye care, that could make you pay less all-in.

3. You may have to stop funding your HSA sooner than expected

Contributing to a Health Savings Account or HSA is a smart thing to do. HSAs are loaded with tax breaks, and carrying a balance with you into retirement could make healthcare much easier to pay for later in life.

But you should know that once you enroll in Medicare, you can no longer contribute money to an HSA. You can take withdrawals to cover eligible expenses, but you can’t add to your balance.

You should also know that if you enroll in Medicare after age 65, you may have to stop making HSA contributions six months before your enrollment date. You are entitled to retroactive Medicare coverage starting at age 65. So if you sign up at age 66, your best bet is to stop funding your HSA at age 65 1/2.

Medicare is full of different rules and it can be difficult to keep track of them all. But at least, keep these important points in mind so that you don’t run into any problems.