By Margo Steinlage, Steinlage Insurance Agency, Sarah Baker, CFP® and Blaine Homan, CFP® from Mason Investment Advisory Services
Medicare enrollment is one of the most consequential financial decisions a person makes at retirement. It is also one of the most confusing.
During our recent Navigating the Medicare Maze webinar, hosted by Mason Investment Advisory Services in partnership with Steinlage Insurance Agency, attendees submitted dozens of questions in real time. The questions were sharp, specific, and reflected the exact concerns that arise when people sit down to plan their Medicare coverage for the first time — or reconsider decisions they made years ago.
What struck us most: nearly every question touched not just on health coverage, but on financial planning. IRMAA surcharges tied to investment income. COBRA coordination that affects primary and secondary payer status. Premium increases that push retirees toward coverage decisions with long-term consequences. Medicare is not separate from your financial plan. For high earners approaching retirement, it is one of the most significant cost variables in it.
Below are the most substantive questions from the webinar, answered in full. We have organized them by topic so you can navigate directly to what matters most to your situation.
Medicare Enrollment Timing and Eligibility
I am still working at 65 with employer coverage. Do I have to sign up for Medicare during my initial enrollment window?
No. If you have active employer coverage through a company with 20 or more employees, you can delay Medicare Parts A and B without penalty until you are ready to retire.
Here is how the process works: approximately 90 days before your desired retirement date, your employer completes a form called the L564 Employment Coverage Verification. If you worked for multiple large employers between age 65 and retirement, each employer must complete a separate L564. You will also complete a CMS 40B application to activate Medicare for your target start date. Together, these forms trigger a Special Enrollment Period that allows you to enroll in a Supplement plan and Part D coverage without gaps or late enrollment penalties.
One important step: confirm that your employer coverage was considered creditable coverage, meaning it met the minimum Part D requirements. This documentation helps you waive any potential Part D late enrollment penalty when you eventually enroll.
How long is the Special Enrollment Period for someone who worked past age 65 with a large employer?
You have an 8-month window that begins the month after employment ends or active group coverage ends, whichever comes first to enroll in Medicare Part B without restrictions or penalties. If you miss this window, you will need to wait for the General Enrollment Period, which runs January 1 through March 31, with coverage beginning the month after you enroll.
Our strong recommendation: enroll as soon as possible after your employer coverage ends, ideally in the same month your coverage terminates. This prevents any gap in primary health coverage and avoids coordination-of-benefits complications that can arise when COBRA is involved.
I am 67 and on a large employer plan and have not signed up for Medicare. Should I?
Not until you are ready to leave your employer coverage. When you do retire, the L564 and CMS 40B process described above will allow you to transition to Medicare through a Special Enrollment Period.
There is one additional trigger worth knowing: if your employer changes your health plan design — for example, switching carriers or significantly restructuring benefits — that change can also initiate your Special Enrollment Period, even if you have not retired. You are not limited to triggering enrollment only at retirement.
I am turning 64 this August. When should I start planning for Medicare?
Now. We recommend beginning the Medicare planning conversation 6 to 18 months before you turn 65 or plan to retire. The decisions you make at initial enrollment have long-term consequences, particularly around the Supplement versus Advantage choice. Starting early gives you time to understand your options, build a coverage timeline, and avoid making rushed decisions under deadline pressure.
What if I retire before age 65? Is there Medicare paperwork to file?
No Medicare paperwork is required before your earliest eligible enrollment window, which opens three months before you turn 65. If you retire early, you will need to secure health coverage through COBRA, retiree benefits, a spouse’s employer plan, or an ACA marketplace plan for the period between your retirement date and Medicare eligibility.
COBRA and Employer Transitions
My employer is subsidizing my COBRA premiums. Is it more cost-effective to stay on subsidized COBRA instead of enrolling in Medicare Part B?
We recommend enrolling in Medicare as soon as your employer coverage ends, even when COBRA is subsidized. Here is why this matters: in most circumstances, once active employment ends, COBRA becomes a secondary payer and Medicare becomes the primary payer. If you are on COBRA without Medicare as your primary, you may have a significant gap in primary coverage without realizing it, which can create unexpected out-of-pocket costs.
Additionally, your 8-month Special Enrollment window begins the month after employment ends or active group coverage ends, whichever comes first, regardless of whether you elect COBRA. Relying on COBRA for too long risks missing that window and triggering late enrollment penalties and restrictions.
Can a small group employer pay for an employee’s Medicare Part B as a benefit?
For large employers (20 or more employees), paying for an employee’s Medicare Part B is prohibited because it can violate Medicare Secondary Payer rules, which are designed to prevent employers from steering employees onto Medicare.
For small employers (under 20 employees), reimbursement arrangements such as an Individual Coverage HRA (ICHRA) or a Small Group HRA can be structured to help employees offset Medicare premium costs. Some smaller employers take a simpler approach and adjust salary to account for the employee’s transition from the group plan to Medicare.
If I am on Medicare and take a new position with a company with more than 20 employees, can I return to employer insurance?
Yes. You can opt out of Medicare Part B at any time and move onto large group employer coverage. When you eventually retire from that employer, you re-enroll in Medicare Part B through the Special Enrollment Period process. The key throughout any transition is maintaining creditable coverage to avoid penalties and gaps.
IRMAA: The Medicare Surcharge High Earners Need to Plan For
What is IRMAA and how is it calculated?
IRMAA stands for Income-Related Monthly Adjustment Amount. It is an additional surcharge added to your Medicare Part B and Part D premiums if your income exceeds certain thresholds. Medicare uses a two-year lookback to calculate IRMAA, meaning your 2026 premium surcharges are based on your 2024 Modified Adjusted Gross Income as reported on your 2024 federal tax return.
For 2026, individuals with MAGI of $109,000 or less and joint filers with $218,000 or less pay the standard Part B premium of $202.90 per month with no IRMAA surcharge. Premiums increase significantly at higher income tiers, reaching a total of $780.90 per month for individuals earning $500,000 or more.
Does IRMAA include investment income, or only wages?
IRMAA is based on Modified Adjusted Gross Income, which includes wages, self-employment income, capital gains, dividends, rental income, and other investment income. It is not limited to earned income. For clients approaching retirement with significant investment portfolios, Roth conversions, planned asset sales, or required minimum distributions, the IRMAA impact of each decision deserves careful analysis as part of the broader financial plan.
If I delay Social Security until age 68 or 70, will I still owe the $202.90 monthly Part B premium?
Yes. The Part B premium is tied to Medicare enrollment, not to Social Security. If you are enrolled in Medicare but have not yet started Social Security benefits, Medicare will send a quarterly invoice for your premiums. You can set up Medicare Easy Pay for automatic bank drafts. Once you begin collecting Social Security, the premium automatically shifts to a deduction from your monthly benefit.
Can I confirm that I do not have to pay the Part B premium if I am still working at a company with more than 20 employees?
Correct. As long as you have active employer coverage through a company with 20 or more employees and you have delayed Medicare Part B enrollment, you are not required to pay the Part B premium. The premium applies only once you are enrolled in Part B.
Medicare Supplement vs. Medicare Advantage
I saw an article about Medigap premiums jumping significantly, with one carrier’s Plan G increasing 45% in Illinois. What options do people have when premiums spike?
Premium increases in the Medigap market are a real and growing challenge nationally. Depending on your state and health status, you typically have three options.
First, if your state has a birthday rule, you may be able to shift to a new plan with equal benefits or in some states switch to a lesser plan benefit, for example, from Plan G to Plan G, or Plan G to Plan N or High Deductible Plan G — without medical underwriting. This reduces your premium but may also increase your out-of-pocket cost-sharing exposure if moving to a lesser plan benefit.
Second, if you are in good health, you can apply to a different carrier’s Supplement plan with equal or lesser plan benefits anytime throughout the year. You will need to go through medical underwriting, but a healthy applicant can often find meaningfully lower premiums with a competing insurer.
Third, you can consider transitioning to a Medicare Advantage plan. This option comes with significant caveats. Once you elect Medicare Advantage, returning to a Medigap plan generally requires medical underwriting, and approval is not guaranteed. This decision should be made carefully within the context of your full health picture and financial plan, not purely as a response to a premium increase.
What is medical underwriting, and when does it apply?
Medical underwriting is the process by which an insurance carrier evaluates your health history before deciding whether to approve or deny your Medigap application. You may be asked about prior diagnoses including cancer, COPD, or other conditions. Carriers use this information to assess your risk profile and determine eligibility.
Underwriting applies when you apply for Medigap coverage outside of a guaranteed issue period — most commonly when switching carriers after your initial enrollment window, or when attempting to return to a Supplement plan after a period on Medicare Advantage. This is one of the most important reasons to make thoughtful decisions at initial enrollment.
I live in Massachusetts. I heard Supplement plans work differently there. Is that correct?
Yes. Massachusetts, Minnesota, and Wisconsin are the three waiver states that did not adopt the federal standardized Medigap plan lettering system (Plans A through N). Each state offers its own branded, standardized Supplement products with different naming conventions and benefit structures. If you live in one of these states, your options and plan names will look different from the national standard.
Medicare Part D Prescription Drug Coverage
I have Medicare Parts A and B with a secondary payer covering my prescriptions. How should I go about reviewing my drug coverage?
You have two options for an annual Part D review.
The first is a self-directed approach. Medicare’s Plan Finder tool at medicare.gov allows you to enter your current medications, dosages, and preferred pharmacy to compare available plans by cost. We also offer a DIY playbook to guide you through this process during the Annual Enrollment Period, which runs October 15 through December 7 each year.
The second option is Part D Passport, a year-round advisory service designed to provide comprehensive, personalized support through the increasingly complex and volatile Part D market. Part D Passport includes annual plan reviews, proactive guidance during enrollment periods, and one-on-one consulting to ensure your plan covers your medications at the lowest possible cost throughout the year.
Where can I find information about Maryland’s birthday rule for Medigap?
Maryland’s birthday rule information is available directly through the Maryland Insurance Administration at insurance.maryland.gov/Consumer/Pages/medicare-birthday-rule.aspx.
Dental, Vision, and ACA Coverage
What is the recommendation for dental and vision coverage since Medicare does not include them?
Original Medicare does not cover routine dental or vision care. Standalone dental and vision policies are available through major national carriers and can be added alongside any Medicare coverage path. The right plan depends on your preferred providers, the level of coverage you need, and your budget. We are happy to research options tailored to your situation.
I am an early retiree whose COBRA has expired and I am currently on an ACA marketplace plan. Do you help with identifying the best ACA plans?
Yes. We review ACA marketplace coverage each November during Open Enrollment and can help you identify the most appropriate plan for your situation, whether on or off the exchange, in any state.
Still Have Medicare Enrollment Questions? Here Is How to Get Help.
Medicare planning is not a one-size-fits-all decision. The right coverage path depends on your health, your income, your retirement timeline, and — especially for high earners — the broader tax and financial planning implications of each choice.
At Mason Investment Advisory Services, we work alongside Medicare specialists like Margo Steinlage at Steinlage Insurance Agency to make sure our clients are making Medicare decisions that align with their complete financial picture. For high-income retirees, the interaction between Medicare premiums, IRMAA surcharges, RMDs, Roth conversions, and investment income can add up to thousands of dollars per year in avoidable costs. Getting this right requires both a Medicare expert and a financial planner working together.
For Medicare coverage questions, contact Margo Steinlage at Steinlage Insurance Agency: margo@steinlageinsurance.com.
For questions about how Medicare planning intersects with your retirement income strategy, tax planning, or financial plan, schedule a conversation with your Mason advisor or visit masoncompanies.com.
The information in this article is for educational purposes only and does not constitute financial, legal, or tax advice. Medicare rules and premium amounts are subject to change. Please consult a qualified Medicare specialist and financial advisor regarding your specific situation.
