Retirement Guidance: Can You Remain on Medicare If You Return to Work?

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It’s not uncommon for people to leave the workforce and return later on. But what does this mean for your Medicare coverage? If your employer offers health insurance, you may be able to take it and remain on Medicare. One will act as primary coverage, while the other will act as secondary coverage, according to UnitedHealthcare. However, the size of the employer offering health coverage matters.

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At companies with under 20 employees, workers generally need to be enrolled in Medicare once they reach the age of 65 to avoid paying extra later. “If they go back to work for an employer with less than 20 employees, they’ll want to keep both Part A and B because Medicare is primary and the group coverage is secondary,” Danielle Roberts told CNBC, co-founder of insurance firm Boomer Benefits.

At larger companies, or those with 20 employees or more, there are a few more rules. CNBC noted that if employer coverage comes with a health savings account, you cannot contribute to it if you remain on any part of Medicare, including just Part A.

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Canceling Part A to take advantage of the HSA might not make much sense, either. “If they’ve already begun taking Social Security retirement benefits, they cannot cancel Part A without having to pay back all the benefits they received from Social Security so far,” Roberts added.

You could drop Part B and use your employer’s health plan, but you first need to check that your employer plan would be considered creditable coverage for Part D.

Additionally, if you have a Medigap policy, you’ll need to drop it. However, Roberts explained that when you pick up Part B again, you get a six-month window to purchase a Medigap policy without underwriting.

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If you do decide to drop Medicare, your employer health coverage must be considered acceptable as primary coverage. If not, you could face penalties once you decide to re-enroll in Medicare, according to UnitedHealthcare.

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About the Author

Josephine Nesbit is a freelance writer specializing in real estate and personal finance. She grew up in New England but is now based out of Ohio where she attended The Ohio State University and lives with her two toddlers and fiancé. Her work has appeared in print and online publications such as Fox Business and Scotsman Guide.
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