I’m turning 65 with retiree benefits … why do I need Part B?

on May 15, 2025

Good day, Toni:

We saw your article about Medicare Part B enrollment in our local newspaper, but my wife’s and my Medicare enrollment situation is different. We will both turn 65 this year, me in June and Carol in September. I have signed up for Medicare Part A only and Carol will enroll for Part A soon.

I retired when I turned 63 with fantastic retiree benefits for both me and my wife. Currently, I am being paid as a 1099 contract worker, so I do not have health benefits with the company where I am working part-time.

We do not see a need to sign up for Medicare Part B because of our coverage under a retiree employer group health plan. Are we correct in this assumption of us not enrolling in Part B? Neither the HR department nor Medicare can give us a straight answer we need guidance.

Please explain what you as a Medicare consultant would recommend that we do about applying for Part B with retiree benefits. Thanks in advance, Toni.

-- Richard and Carol from Corsicana, Texas

Hello Richard and Carol:

Great Medicare question. I would advise you to enroll in Part B NOW because both you and Carol are in your Medicare Initial Enrollment Period (IEP). Not enrolling in Medicare Part B can result in a Medicare nightmare.

I did write a Medicare article recently about someone who was self-employed, working as a “sole proprietor” with individual coverage and not a “contract worker” as you currently are, Richard, but the same rule applies. A contract worker's status is typically as an independent contractor who is hired to perform a specific task or project under a contract and is not considered an employee who receives employer benefits.

Medicare recognizes “true” employer and union health plans for someone working full-time for that company if the working employee and non-working spouse are covered. They may delay Part B without receiving the famous Medicare Part B penalty.

Page 19 of the 2025 Medicare & You handbook states that COBRA and retiree health coverage do not count as current employer coverage. Individual health plans also are not considered employer coverage for those who are self-employed. Richard, since you and Carol are covered by a retiree employer group health plan, I would recommend that you and Carol enroll in Medicare during your IEP.

Richard, NOW is yours and Carol’s Medicare IEP, which is a 7-month period that begins as you turn 65. You both have 3 months before turning 65, the month you turn 65 and 3 months after to enroll in Parts A and B. Enrolling during your IEP will prevent you and Carol from receiving the Part B 10% penalty for each 12-month period you could have had Part B but failed to enroll.

I advise anyone who contacts the Toni Says Medicare team for a personalized Medicare consultation to enroll in Medicare Parts A and B if you are “not working” for a company with true employer benefits. Not working with qualifying employer insurance benefits is what Medicare looks for when it comes to the famous Medicare Part B penalty.

Readers, enroll in Medicare the correct way when you are turning 65 or after 65 and retiring from your company because you do not get a second chance. “I didn’t know” is not an excuse for Social Security, which is the government agency that enrolls Americans in Medicare and administers the Medicare penalty!

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Toni King is an author and columnist on Medicare and health insurance issues. She has spent nearly 30 years as a top sales leader in the field. If you have a Medicare question, email info@tonisays.com or call 832-519-8664. The “Medicare Survival Guide Advanced” edition and her new “Confused about Medicare” video series are available at www.tonisays.com.s