31st Mar 2016

When you think of Medicare, most people believe it is only for people of retirement age.  Although retirement age is when most people begin to think about Medicare benefits, actually the Medicare program covers more than just those who have worked all their life. There are exceptions to Medicare benefits eligibility you may be unaware of now.

More than 55 million people in the United States were covered by Medicare in 2015.  The majority of individuals covered were people aged 65 or older (84%).  The remaining individuals received Medicare services as a result of a disability.  Funding for Medicare, like Social Security, is through mandatory withholding from workers paychecks. When individuals reach the age of 65, or meet other eligibility requirements, they are entitled to Medicare services. You will probably receive Medicare Part A coverage free of charge because of your payroll deductions, but that is only the tip, of what can be a confusing time for obtaining additional Medicare benefits, which actually are paid for as you go

To receive full Medicare coverage at 65, you (or your spouse) have to have earned enough credits to be eligible for Social Security.  Eligibility is based upon credits consisting of each $1,260 you earn equates to one credit, but you can only earn a maximum of four each year.  Forty credits are required to receive full benefits, which typically is 10 years in the workforce.

Some of our clients have been self employed or worked for employers who failed to withhold Social Security or Medicare premiums.  Even in those circumstances you may still be eligible for Medicare – either through your retirement system or through your spouse.  If you continue to work after reaching the age of 65, you are still eligible for Medicare benefits.

What about a stay-at-home parent or spouse who hasn’t earned the mandatory 40 credits?  You can still receive Medicare benefits at age 65 based on your spouse’s work record, if your spouse earned the required 40 credits and you’ve been married for at least one year.  People in same-sex marriages may qualify for spousal benefits if they live in the state where they were married or in another state that recognizes same-sex marriages – or are civilian or military employees of the federal government. For same-sex couples outside of these categories, the guidelines are vague but couples should apply anyway.

What happens if you get divorced prior to reaching 65 years of age?  If you’re divorced and don’t qualify for Medicare under your own work record, you may, nevertheless still qualify based on your ex-spouse’s record as long as your marriage lasted at least 10 years and you’re currently single.

Disability

Individuals who have suffered an injury, physically or mental, may be eligible for both Medicare and Social Security Disability Insurance.  In order to receive Medicare disability benefits, you must first receive Social Security Disability Insurance (SSDI) benefits for 24 months.  There is usually a five-month waiting period after a worker or widow is deemed disabled before he or she can receive Social Security Disability benefits.  During this waiting period, the person may be eligible for coverage under an employer’s health plan or COBRA if they’re no longer employed.

Deviations from the general qualification requirements include individuals suffering from end stage renal disease (ESRD) or amyotropic lateral sclerosis (ALS, also known as Lou Gehrig’s disease) there is no 24-month waiting period for benefits.  A person diagnosed with ESRD can generally begin receiving benefits three months after a course of regular dialysis or after a kidney transplant. As soon as a person diagnosed with ALS begins collecting Social Security Disability benefits, he or she is enrolled in Part A and Part B Medicare benefits.  If you are capable of still working you may be able to work and receive Medicare disability benefits for a transition period under Social Security’s work incentives and Ticket to Work programs.

This transitional period has three time frames. The first, the trial work period, is a nine-month period during which you can test your ability to work and still receive full benefits.  The nine month trial period does not have to be consecutive months.  Any month in which you earn at least $810 (after expenses) or work more than 80 hours if you’re self-employed counts as a month. The trial period continues until you have worked for nine months within a 60-month period.

Once those nine months are used up, you move into the next phase, the extended period of eligibility.  For the next 36 months, you can still receive benefits in any month you aren’t earning “substantial” benefits.  Substantial benefits is generally defined as earning anything over $1,130 per month or $1,820 if you are blind.

Finally, you can still receive free Medicare Part A benefits and pay the premium for Part B for at least 93 months after the nine-month trial period if you still qualify as disabled. If you want to continue receiving Part B benefits, you have to request it in writing.

If you’re disabled, you may incur extra expenses that those without disabilities do not. Expenses such as paid transportation to work, mental health counseling, prescription drugs and other qualified expenses might be deducted from your monthly income before the determination of benefits, which may allow you to earn more and still qualify for benefits.

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