Do I need Medicare Part B if I am an active employee over 65 with health coverage through my employer?

With most employer-sponsored health plans, you don't need to enroll in Medicare Part B medical insurance while you're still an active employee. However, whether it's a good idea anyway to enroll in Medicare Part B depends on the extent of health insurance coverage provided through your employment, the size of your employer, and how much the insurance costs you.

First, there are Medicare's rule regarding late enrollment in Part B. The general rule is that if you don't sign up for Medicare Part B when you're first eligible for it at age 65, you pay a penalty of 10% per year for each year you have delayed enrolling, if and when you do finally enroll in Part B. However, this rule does NOT apply to people who have a group health insurance plan through their current employment. So, if you've got a health insurance plan through your current job, you don't have to worry about a penalty for delayed enrollment.

The next thing to consider when deciding whether to sign up for Medicare Part B is the size of your employer. If your employer has fewer than 20 employees, its health plan would only be a secondary payer if you are eligible for Medicare Part B -- meaning that your health plan would cover only a small portion of your medical costs, leaving the large share for Medicare Part B to pay. In this case, you'd need to enroll in Medicare Part B in order to get full coverage. If you work for a small company, check with your benefits administrator at work to find out whether your employer-sponsored health plan would be the primary payer (in which case you don't need Medicare Part B).

Finally, you have to determine if it makes financial sense for you to enroll in Medicare Part B (even if you won't be penalized for not signing up). This depends on how good the coverage is that your employer-sponsored health plan provides compared to what you would get under Medicare Part B, and how much you are required to contribute to it. The monthly premium for people first signing up for Medicare Part B in 2011will be $115.40 per month. If your monthly contribution to your employer-sponsored health plan is two or three times higher than this but it's coverage is not significantly better than what's provided by Medicare Part B, you might consider dropping your employer coverage and signing up for Medicare Part B, or in a Medicare Part C Medicare Advantage plan instead. Also, if you regularly have more than $96.40 per month in medical bills that your employer-based insurance doesn't cover but that Medicare Part B would cover even if it is only a secondary payer, then you might consider signing up for Medicare Part B in addition to (meaning, without dropping) your employer-sponsored plan.