Generally, there is no advantage to enrolling in Medicare if you work for IBM past 65. Some people do choose to enroll in Medicare part A (hospitalization coverage) because there is no premium payment for part A and it might provide secondary coverage in some circumstances (e.g., part A might permit an overnight stay in a hospital for a given procedure where IBM's insurance might not). However, if you have a Health Savings Account (HSA) with a High Deductible Health Plan (HDHP) DO NOT enroll in Medicare part A if you want to be able to contribute to your HSA. Contributions stop as soon as you enroll in part A.
Also, be careful of when you start taking Social Security if you have an HSA. Enrolling in Social Security causes up to a six month retroactive enrollment in part A if you also enroll in Medicare. You will pay a tax penalty for any HSA contributions you made in the prior six months if you were Medicare eligible. I know, it's complicated. If you want to keep it simple, just remember to stop contributing to an HSA six months before you retire if you plan to immediately collect Social Security. The good news is the money remaining in your HSA will be available to use tax free for your Medicare expenses until it is depleted.
When you (or IBM) decide it is time to retire there a a few things you must do to guarantee a smooth transition. Generally, I recommend you enroll in Medicare part A & B a month before you leave your job to be sure you have no enrollment problems. It will cost you a month worth of your part B premium payment but that's a whole lot better than having no insurance coverage while you try to sort out a problem.
You actually have 8 months from the last day of your employment to enroll into Medicare. DO NOT take 8 months to do it. Also DO NOT take COBRA unless the COBRA coverage includes something that Medicare does not cover and you need that coverage. COBRA is expensive SECONDARY insurance coverage if you are over 65. That means if you get sick, it will only pay your co-pays and you will be responsible for the bulk of the provider costs if you do not have Medicare.
There are two forms you need to bring to Social Security (which is how you enroll in Medicare) when you are about to retire. Yes, I am recommending you physically go to a Social Security office. You can easily find the forms online:
- Form CMS 408 (Application for Enrollment into Medicare) to be filled out by you
- Form CMS L564 (Request for Employment Information) to be filled out by IBM HR. The second form is the proof you had continuous employer health insurance after you turned 65 so that you will not have late enrollment penalties. Why do you have to "walk it in"? Social Security has been significantly impacted by federal budget cuts. Mailing it in is a little risky because of the cuts. If it gets lost you will have no proof of who actually processed the form.
When you walk it in, get the name of the agent who takes the forms and the date they processed your application. That is important information to have in case any mistakes are made.