medicare and HSA Archives

Medicare When Self-Employed

For many people, turning 65 and starting to collect Social Security means being automatically enrolled into Medicare. There are exceptions to this and ways to put off enrolling into Medicare, such as if you are still working and have health insurance through your employer. But what happens when you are self-employed and you’re about to turn 65? Do you have to sign up for Medicare, or can you delay enrolling without facing a penalty? Being self-employed impacts your Medicare options, so it is important to understand how you can be fully insured and avoid any penalties.

How Medicare Works

the numbers 65 as candles that are lit — *Normally, if you are collecting Social Security, then you will be automatically enrolled into Medicare when you turn 65.*

Self-employed or not, as long as you have been paying income taxes in the U.S., you will be automatically enrolled in Medicare Part A when you turn 65, but only if you are already receiving Social Security. If you are not receiving Social Security, then you will need to manually sign up for Medicare during your Initial Enrollment Period, which is the 3 months before your 65th birthday, the month of your 65th birthday, and the 3 months after your 65th birthday. You can sign up for Medicare Parts A and B at this time or you can choose to opt out of Part B; it is optional because it has a premium. If you decide to enroll in Part B later, though, you will pay a penalty on your premium for as long as you have Medicare. If you do decide to enroll into Medicare and you are still self-employed, then Medicare will be your primary insurance.

Self-Employed With Marketplace Plan

If you are (or were) self-employed, you might have a Marketplace insurance plan if you aren’t covered by your spouse’s employer-based plan. When you turn 65, you have the option to cancel your Marketplace plan without a penalty and join Medicare, or you can choose to keep your Marketplace plan. If you do decide to keep your health insurance plan, then it will become secondary to Medicare, meaning Medicare will be your primary payer. Be aware that having a Marketplace plan does not qualify you to delay enrolling in Medicare without a penalty, so you will have to enroll in Medicare during your Medicare Initial Enrollment Period when you turn 65 in order to avoid paying extra on your Part B premiums.

Self-Employed With Employer-Based Coverage

older caucasian man working on a saw table — *If you are enrolled in an employer’s health plan, then you can wait to enroll into Medicare without penalty.*

If you don’t have a Marketplace plan, but are covered through another job you have or through your spouse’s plan, then you might be able to wait to enroll into Part B and not face a penalty. If you or your spouse’s workplace has fewer than 20 employees, you will be required to sign up for Medicare at age 65, but if it has fewer than 20 then you will not have to.

The number of employees at you or your spouse’s workplace also determines which insurance plan will be your primary payer. If you or your spouse’s workplace has 20 or more employees, the employer-based plan will be primary. If you sign up for Medicare and you also have an employer-based plan through a business with less than 20 employees, then your employer’s health plan will become secondary coverage after Medicare.

Self-Employment & Medicare Premium Deductions

Since 2012, the IRS has allowed self-employed individuals to deduct all Medicare premiums from their federal taxes. This includes Medicare Part B and Medicare Part A premiums, Medicare Supplement Plan premiums, and your spouse’s Medicare premiums. When deducting your Medicare premiums, your premium payments are subtracted from your gross income, which is different from doing an itemized deduction for medical expenses that are taken after your adjusted gross income (AGI) is calculated. In order to deduct your premiums, you have to report a profit from your business.

Using Your HSA

If you are 65 or older and self-employed, you can open and contribute to an HSA as long as you meet these HSA eligibility requirements:

You’re covered by a HSA-qualified medical plan.
You’re not someone’s tax dependent.
You don’t have any conflicting coverage (including being enrolled in Medicare).

If you are enrolled in Medicare then you can no longer contribute to your Health Savings Account (HSA). However, you can continue to withdraw money tax-free from the account and use it to help pay your Medicare premiums, deductibles, copays, and coinsurance.

Understanding how Medicare works can be tricky. You need to make sure that you have all of your bases covered so you are insured and do not receive any surprise bills. EZ.Insure will go over all of your options and make sure that you are prepared to transition to Medicare, and we can sign you up for a Medicare Supplement Plan for extra savings if need be. To get instant, free quotes, enter your zip code in the bar above, or to speak to one of our licensed agents, call 888-753-7207.

7 Essential Rules Of Medicare You Need To Know

If you’re about to turn 65, then you have a lot to look forward to, including finally being able to take advantage of the Medicare benefits that you’ve worked so long for. You probably already know that once you turn 65, you can enroll in Medicare Parts A and B. But if the ins and outs of Medicare are new to you, take a look at our list of the 7 rules of Medicare that you need to know. These rules will help you avoid penalties, prepare you for the costs of Medicare, and allow you to maximize your benefits.

1. The More You Make, The More You Pay

hand holding a blue bank card — *The IRMAA determines how much you will pay for Medicare premiums.*

Medicare Part B premiums are generally pretty affordable for most: this year premiums are $144.60 a month. However, if your income goes above a certain amount, then you will have to pay more in premiums. The income-related monthly adjustment amounts (IRMAAs) determines the amount you will have to pay. Currently, you will face IRMAA surcharges if you earn over $87,000 individually, or $174,000 jointly.

2. Medicare & HSAs Don’t Go Together

Do you have a health savings account (HSA), alongside either employer-based or private insurance? These accounts are great for putting aside pre-tax money for medical expenses. But, once you enroll in Medicare, they can also cause a tax headache for you if you’re not careful. Don’t worry, you can still use the money that is already in your account., but you can no longer contribute to your HSA. If you do, you will face tax penalties on any money you do contribute.

3. You Can Have Medicare & Private Insurance

If you are one of the many people 65 and older who decide to keep working and put off retirement, then you may be wondering whether you’ll have to give up your employer-based insurance to enroll in Medicare, or vice versa. No need to worry: if you choose, you can have both private or employer-based health insurance and Medicare at the same time. One will be the primary payer and the other the secondary payer, under a process called coordination of benefits. The rule of thumb when you have both employer-based insurance and Medicare is: if the employer has 20 or more employees, then the group health insurance plan will be the primary payer. If the employer has less than 20 employees, then Medicare will pay first.

4. You Don’t Need to Be Collecting Social Security to Enroll in Medicare

Waiting to start collecting Social Security could be a smart option for some people: the longer you wait to start collecting, the higher your monthly payments. And, if you’ve decided to wait as long as possible to start collecting SS benefits, you can still enroll in Medicare without any problems. However, don’t wait to sign up for Medicare! The longer you wait past your initial enrollment period, the more you’ll have to pay for your Part B premiums.

5. You Can Change Your Coverage

calendar with the date October 15 on it — *You can change coverage during the annual enrollment period from October 15 to December 7*

Not happy with the coverage you have? You can change it, but only during the annual enrollment period from October 15 to December 7. During this time, you can change from Original Medicare to a Medicare Advantage Plan, or switch your Advantage plan. Just know that if you have Original Medicare and a Medicare Supplement Plan, switching to an Advantage Plan will mean you will lose your Medicare Supplement Plan. Review your plan every year to make sure that it has not changed and still offers the coverage you need.

6. You Can Dispute a Denied Claim

Mistakes happen. Sometimes Medicare will deny a claim that they should’ve paid. Medicare processes millions of claims a day, and sometimes there is a billing error or a problem with your coordination of benefits. When this happens, you can absolutely dispute the claim. When you get denied for a claim, you will receive a Medicare Summary Notice (MSN) listing the denied claim/s. You need to file your appeal within 120 days of receiving the MSN.

Do not simply accept that a claim was denied. Ask questions and make sure that your denial was not caused by a clerical error.

7. Medicare Supplements Will Help You Save More

Medicare only pays 80% of Medicare Part B costs; you are responsible for the other 20% out-of-pocket costs. These costs can become a burden for some people – and this is where a Medicare Supplement Plan can come in handy. Medicare Supplement Plans are offered by private insurance companies; you pay a monthly premium, and the plan pays most of your expenses not covered by Medicare Part B. For example, if you have a $4,000 ambulance bill and have already met the yearly Medicare Part B deductible, Medicare Part B will pay 80% of the bill. This leaves you to pay the 20% that is left, $800, out of pocket. But if you have a Medicare Supplement Plan that covers Part B copayments and coinsurance costs, then it will pay the remaining $800.

Are you interested in a Medicare Supplement Plan? There are around 10 different types of Medicare Supplement Plans to choose from, and each offers different coverage at different prices. If you want to pay less in out-of-pocket costs, then a Medicare Supplement Plan is perfect for you. EZ gets how time consuming and frustrating it can be to search for the right plan, so we will offer you an agent that can compare all the available Medicare Supplement Plans in your area, and help you choose the best one for your needs and budget. To get your free quotes, simply enter your zip code in the bar above, or to speak with an agent, call 888-753-7207.