Video

Client Profile

During a Medicare appointment in February of 2025, I asked Joan’s husband—a 70-year-old still working—if he was planning to enroll soon. He said he loved his job and might keep working a few more years. He had been with the company for 35 years and was still covered by their group insurance.

The Challenge

Upon further discussion, I learned that his company had fewer than 20 employees. That’s critical—because under Medicare rules, employer coverage from a company with fewer than 20 employees is not considered creditable for delaying Part B.

This meant, unbeknownst to him, he had been going without creditable Part B coverage for five years—and would now face a permanent 50% Part B penalty (10% for each full 12-month period delayed). Worse, since he missed his initial enrollment window, he must now wait for the General Enrollment Period (Jan–Mar), delaying coverage further.

Financial Professional’s Input

The client reached out to his financial advisor, who contacted me. This was the first time the planner had encountered the under-20-employee rule, and unfortunately, there was no way to reverse the penalty. With the 2025 base Part B premium at $185/month, the client will pay a penalty of an additional $92.50/month—or $1,110 annualized for 2025. That amount will grow as Medicare premiums rise. The planner now had to revise their income and retirement projections.

Outcome

While $1,100+/year may not seem catastrophic, it’s a frustrating and unnecessary cost—especially on a fixed income. It could have been avoided entirely with a timely Medicare consultation.

Financial Planner Takeaway

Medicare rules don’t always align with what clients or planners expect. Company size, plan structure, and enrollment timing can trigger lifelong penalties. Introducing a Medicare advisor at age 64—even when retirement isn’t imminent—helps catch these issues early, prevents costly surprises, and protects the financial plan you’ve worked hard to build.

Client Profile

A local financial professional referred a client named Carol for help with her Medicare planning. Carol was turning 65 and retiring. Her husband—five years younger—is the HSA account holder, still working, and carries family-level High Deductible Health Plan (HDHP) coverage through his employer. He was making family-level contributions to his HSA.

The Challenge

The couple believed they would need to stop making family-level HSA contributions once Carol enrolled in Medicare. They were preparing to notify the employer's benefits team to adjust the HSA contribution level. During our discussion, I suggested this might not be necessary and recommended they revisit the issue with their financial professional. Based on my experience and IRS Publication 969, this scenario warranted a closer look.

Financial Professional’s Input

I contacted their financial professional, and we walked through the rules together. Since Carol's husband:

• Remains HSA-eligible
• Is not enrolled in Medicare
• Continues to carry a family HDHP

…he may continue contributing at the full family-level limit to his HSA. In situations like this—where the eligible spouse maintains family coverage—the higher contribution limit can still apply, barring other disqualifying factors.  

After reviewing the guidance, the financial professional agreed and advised the couple accordingly. Without this collaboration, the clients would have unintentionally reduced their HSA contributions by over $4,000 per year.

Outcome

The couple will continue contributing over $9,000/year to their HSA (including catch-up), rather than dropping to ~$5,000.
Over five years, this preserves $20,000+ in additional tax-advantaged savings.

Financial Planner Takeaway

Medicare enrollment often intersects with tax and benefits planning. A quick, coordinated review avoided a costly misstep—and helped the financial planner stay in control of the broader strategy.