Don’t Make These 3 Mistakes

By: Mark Mabaquiao

 

1. Paying HIGHER Part B Premiums

If you decide to withdraw money from your retirement account or receive a surge in income a couple years before becoming Medicare eligible, you may have to pay up to 220% more for your monthly Part B premiums. This is because the government looks at your modified adjusted gross income as reported on your IRS tax return from two years ago and if it’s above a certain amount ($85,000 if you file individually or $170,000 if you’re married and file jointly), you may pay much more than the standard monthly premium.

2. NOT Delaying Part B

If you have health coverage through an employer or union and you continue to work after becoming Medicare eligible, it might be to your financial advantage to delay Part B enrollment. Contact your employer or union to find out how your coverage works with Medicare. If you decide to delay, you can sign up for Part B without paying a penalty later on after your employment coverage ends. Just remember that coverage based on current employment does not include:

• COBRA

• Retiree Coverage

• VA Coverage

• Individual Health Coverage

3. Contributing to Your HSA

If you choose to sign up for Medicare Part A, you must stop contributing to your health savings account (HSA) or face a penalty. If you have an HSA with a qualified employer health plan, you may want to consider not enrolling in Part A if you continue working after becoming Medicare eligible. Contact your employer to find out how your coverage works with Medicare. Also note that when you begin to receive Social Security (SS), Part A automatically begins. You need to be sure to stop all contributions to your HSA up to six months before you collect SS benefits. This is because when you apply for SS, Part A will be retroactive for up to six months and you may be penalized.