Medicare is a federal health care plan available to persons at age 65 or older. Medicare becomes the primary coverage for you and any covered dependents age 65 years of age or older (or disabled) once you have retired.
- If you retire at age 65 or older, apply for Medicare Parts A and B before the end of the month in which you retire for coverage to begin the first of the month after your retirement.
- If you retire before age 65, apply for Medicare Parts A and B approximately three months before your 65th birthday for coverage to begin the first of the month in which you turn 65.
- Medicare will begin the first of the month before your 65th birthday if your birthday falls on the first of the month.
Medicare is also available for people who have been entitled to Social Security disability benefits for 24 months, or have end-stage renal disease (permanent kidney failure). Medicare is directed by the federal Centers for Medicare & Medicaid Services. Local Social Security Administration offices take applications for Medicare.
What Medicare Covers
Medicare comes in several parts.
- Inpatient hospital services are covered by Part A with no monthly premium cost.
- Outpatient medical services are covered by Part B with a monthly premium cost.
- Outpatient prescription drugs are covered by Part D with a monthly premium cost for most people. The University of Michigan strongly urges Medicare-eligible prescription drug plan members and their enrolled dependents not to enroll in Medicare Part D except if you are retired or on long-term disability and you apply for and are approved for Medicare low-income prescription drug assistance. The U-M prescription drug plan offers more comprehensive coverage and lower out-of-pocket costs for most members than Medicare Part D. (If you enroll in a Medicare Part D plan, your Medicare Part D plan will be your primary prescription drug coverage and must be billed first. You must follow all Medicare Part D rules and policies when filling prescriptions. Your U-M drug plan administered by MedImpact will provide secondary coverage and should be billed after Medicare Part D.)
Both Medicare Parts A and B have separate deductibles that must be met before Medicare benefits are payable. Part B benefits are also subject to a 20 percent patient coinsurance. Non-participating Medicare health care providers may also bill you for amounts above Medicare’s deductible, coinsurance, and approved amounts. It may be helpful to look over definitions of health coverage and medical terms.
How Medicare Parts A and B Affect Your U-M Health Plan
- Medicare becomes the primary coverage for you and any covered dependents age 65 years of age or older (or disabled) once you have retired.
- Your U-M health plan becomes secondary or supplementary to Medicare.
- All services must be submitted to Medicare first for payment.
When to Enroll
If You Retire at Age 65 or Older
If you and your spouse are age 65 or older at the time of retirement, you must apply for Medicare before the end of the month in which you retire or your enrollment will be delayed, causing claim problems until you are enrolled. The SSC Contact Center will give you a confirmation notice of your retirement date to take to your local Social Security Office to verify your eligibility to enroll under the Medicare Special Enrollment Period.
If You Retire Before Age 65
If you and/or your covered dependents are receiving Social Security income benefits by age 65, you will automatically be notified and enrolled in Medicare Parts A and B by Social Security. Coverage will begin the first day of the month in which the 65th birthday occurs.
If you are already retired, and are not receiving Social Security benefits, you must complete an application to enroll in Medicare. You should plan on completing an enrollment form approximately ninety days before you turn 65. On the first day of the month that you turn 65 (or the first of the previous month, if your birthday falls on the first of the month), your coverage with the university will be changed so that the university’s coverage will not pay for anything that Medicare Parts A and B would have paid for. You can phone 800-772-1213 (TTY 1-800-325-0778) to schedule an appointment with a Social Security counselor at an office near you or to request the enrollment forms by mail.
Failure to Enroll
Retirees and their dependents must enroll in Medicare benefits when first eligible. If you or a dependent that is eligible for Medicare fail to enroll when first eligible, the university’s coverage will not pay for services that would have been paid by Medicare if Medicare enrollment had occurred. There may be a penalty for late Medicare enrollment of 10 percent a year for each year you could have been enrolled.
Medicare Enrollment Periods and Deadlines
Initial Enrollment Period
Your Initial Enrollment Period (IEP) for Medicare lasts for seven months, from three months before the month you turn 65 through three months after the month you turn 65. For example, if your birthday is June 15, your IEP lasts from March through September.
If you apply during the three months before the month you turn 65, Medicare coverage starts the first day of the month you turn 65. (For example, if your birthday is June 15 and you apply in March, April, or May, coverage starts June 1.)
If you apply during the month you turn 65, Medicare coverage starts the first day of the following month. (For example, if your birthday is June 15 and you apply in June, coverage starts July 1.)
If you apply during the month after the month you turn 65, Medicare coverage starts the first day of the second month after you apply. (For example, if your birthday is June 15 and you apply in July, coverage starts September 1.)
If you apply during the second or third month after the month you turn 65, Medicare coverage starts the first day of the third month after you apply. (For example, if your birthday is June 15 and you apply in August, coverage starts November 1; if you apply in September, coverage starts December 1.)
You and/or your spouse/OQA would enroll during the IEP if:
You are retiring during this period.
You retired already and you and/or your spouse/OQA are now turning 65.
Your OQA is turning 65, regardless of your employment status. Your OQA must enroll during his/her IEP.
Special Enrollment Period
Your Special Enrollment Period (SEP) for Medicare lasts for eight months following the month that coverage through your or your spouse’s employer health plan ends, if you are age 65 or older at retirement. For example, if you retire on December 31, your SEP lasts from January through August.
If you apply by the end of the month in which you retire, Medicare coverage will begin the first of the month following your retirement date. (For example, if you retire on December 31 and apply in December, coverage starts January 1.)
If you apply beyond the end of the month in which you retire, Medicare coverage will begin the first of the month after you apply. (For example, if you retire on December 31 and apply in March, coverage starts April 1. You will have limited health coverage from January through March. Your U-M health plan will not cover any services from January through March that would have been covered by Medicare if you had enrolled earlier.)
You and/or your spouse would enroll during the SEP if you are retiring at some point after your initial enrollment period and are age 65 or older at retirement. Your OQA must enroll during his/her IEP.
General Enrollment Period
If you do not enroll when first eligible during the Initial Enrollment Period or Special Enrollment Period, the next opportunity to enroll would be during the General Enrollment Period (GEP), which lasts from January 1 through March 31 of each year. If you enroll during the GEP, Medicare coverage will start on July 1.
If you delay Medicare enrollment beyond your Initial Enrollment Period or Special Enrollment Period, your U-M health plan will not cover any services that would have been covered by Medicare if you had enrolled earlier.
The cost of Medicare Part B will increase 10 percent for each 12-month period you could have been enrolled but were not.
Enrolling in Medicare While Still Employed
You may enroll in Medicare while still employed if you become eligible. However, since your U-M coverage is the primary policy while you are an active member of the faculty or staff (including while you are on phased retirement or a furlough), you may not be able to use Medicare until you retire.
Some individuals choose to enroll in Medicare Part A while they are still working at age 65 because it is free, and wait until retirement to enroll in Part B through the Special Enrollment Period. Please note that OQAs of active employees must enroll in Medicare Parts A and B when they first become eligible (due to disability or age). Medicare becomes primary for OQAs regardless of employment status.
After enrolling in Medicare, if you return to active employment in a benefits-eligible position with the university or you become eligible for benefits under ESR, U-M will again provide primary coverage for you, your spouse, and other enrolled dependents during your period of active employment. The only exception is for emeritus faculty, who maintain retiree status and primary coverage through Medicare.
If You Live or Plan to Move Outside the U.S.
Medicare does not cover services received in foreign countries. If you decline Medicare Part B because you plan to move abroad but later decide to return to the United States, there may be a penalty for late Medicare enrollment of 10 percent a year for each year you could have been enrolled. If you are not enrolled in Part B, your health plan may reject charges for services received in the United States.
Call the U-M SSC Contact Center to speak with a counselor to determine your health plan options.
University of Michigan Shared Services Center
HR Contact Center
Social Security Administration