Medicare's initial enrollment period begins three months before your 65th birthday and continues until three months after your 65th birthday, seven months in total. Medicare enrollment is automatic if you currently receive Social Security benefits or qualify for Medicare insurance because of a disability before age 65. If you are presently not receiving Social Security benefits or do not qualify for Social Security disability, you must enroll in Medicare. The only exception is if you are still working and have a qualified union or employer group health insurance plan from an employer with 20 or more employees. CMS (Centers for Medicare & Medicaid Services) does not consider employer-group health insurance from an employer with less than 20 employees as qualified health insurance.
If you are eligible to delay enrolling into Medicare, it would be best to still enroll in Medicare Part A and only delay enrolling into Medicare Part B. If a catastrophic event happens, where you land up in the hospital, Medicare Part A will act as secondary insurance and may help pay some of the costs not covered by your group's health insurance plan. Remember, Part A does not have a monthly premium if you paid Medicare taxes for ten years.
NOTE: If your employer group plan is attached to an HSA, you must stop the contributions into the HSA six months before enrolling into any form of Medicare or stop the contributions before the initial month of eligibility, or you may incur a tax penalty.
If you do not have access to a qualified group health insurance plan, signing up for Medicare during your initial enrollment period is imperative. Do this as early as possible so your coverage begins on the first of the month of your 65th birthday. Medicare benefits will start on the first day of the month during the month of your 65th birthday as long as you enrolled during one of the three months prior to your 65th birthday. If you wait until the month of your 65th birthday or one of the three months following your 65th birthday, your effective date can be delayed up to six months.
If your Medicare Part A and/or Part B enrollment is not automatic, and you do not have access to a qualified group health insurance plan, and if you don't sign up for Medicare Part A and/or Part B during Medicare's Initial Enrollment Period (IEP), you will be subject to a 10% penalty for every 12 months you delay your enrollment. The Medicare Part A penalty remains in place for twice the number of years you didn't sign up, and the Medicare Part B penalty remains in place for life.