Your Medicare eligibility begins:

• When you turn age 65
• 24 months after you become eligible for Social Security Disability Insurance
• If you’re diagnosed with End-Stage Renal Disease (permanent kidney failure) or ALS (Lou Gehrig’s Disease)
   

You can enroll in Medicare three months before, and three months after, the month in which you first become eligible—and you’re no longer covered by Workday. With only a few exceptions, Medicare levies a financial penalty for the rest of your life if you don’t enroll within this window.

If you wait until the last 3-4 months of your initial enrollment period, coverage could be delayed or denied.

If your spouse is still working

You can join your spouse’s employer-sponsored plan with no penalty. When your spouse retires, you’ll need to enroll in Medicare according to the chart above. 

If you enroll in COBRA coverage when you retire

You must enroll in Medicare Part B within eight months, and in Part D within 63 days, of your last day at Workday. If you don’t, you’ll be subject to a lifetime penalty. Penalties are separate for Parts B and D. Learn more about COBRA coverage.

If you qualify for a Medicare Special Enrollment Period 

These circumstances widely vary. Consult the Medicare website for details.

Same coverage as now, no questions asked. But it comes at a cost.

Workday heavily subsidizes your health premiums. With COBRA, you pay the full unsubsidized amount of your premiums, plus a 2% administrative fee. Most times, you’re better off enrolling in Medicare (if you’re eligible), joining your spouse’s employer-sponsored plan (if applicable), or working with Via Benefits to find a plan on the Health Insurance Marketplace.

If you do decide to enroll in COBRA, you have 60 days from the date your Workday coverage ends to enroll. As long as you enroll within the 60-day window, you won’t have a gap in coverage for the period in between the end of your Workday coverage and the date you submitted your COBRA enrollment. COBRA retroactively covers you.

It normally doesn’t. But, sometimes, your circumstances justify the expense of COBRA.

You’ve met your deductible and/or out-of-pocket maximum for the year. Your progress toward your deductible and out-of-pocket maximum doesn’t reset if you enroll in COBRA. So, if you’ve already hit those marks, COBRA premiums might cost you less than enrolling in another plan and starting from scratch.

You (or someone you cover) has a major medical event on the calendar. You’ve picked the doctor and date for your knee replacement surgery. You know the doctor is in your plan’s network. The surgery is happening soon. Figuring that out with a new medical plan would be disruptive, and you aren’t sure your doctor would be in your new network. COBRA is a good temporary option.

You have a large balance remaining in your Health Care FSA. You can’t be reimbursed for expenses incurred after your last day at Workday. If you have a big balance to spend down, the amount of money you’d leave on the table might justify enrolling in COBRA for a few months.

Don’t mess around with Medicare

Be very careful if you’re thinking about enrolling in COBRA while you’re eligible, or about to be eligible, for Medicare. Missing a deadline could result in a permanent financial penalty.

Show me the risks

Most cases. COBRA premiums alone normally outweigh other financial considerations. If you’re on the fence, here are some circumstances in which COBRA probably isn’t your best choice.

You’re eligible for Medicare. In select circumstances described above, and even then, only for a few months, COBRA could work. Still, enrolling in COBRA while you’re eligible for Medicare requires that you pay extremely close attention to deadlines. Missing the initial enrollment period for Medicare could result in a permanent financial penalty. Is it worth the hassle?

It’s early in the year. Chances are you haven’t come close to your deductible or out-of-pocket maximum yet. You’re likely better off in a medical plan with lower premiums than COBRA.

Your Health Care FSA balance doesn’t justify it. Leaving money on the table never feels good, so spend as much of your Health Care FSA balance as you can. But don’t go in the other direction and waste $1,000 in COBRA premiums for $500 in FSA money.

Other plans do the trick. Don’t overcomplicate this. Most people are better off with options besides COBRA. Everyone is eligible to enroll in a plan on the Health Insurance Marketplace (work with Via Benefits to navigate your options). If your spouse is still working, they can cover you on their employer-sponsored plan. And, if you’re eligible for Medicare, go enroll in it!

• Upon your retirement, your Medicare-eligible dependent should enroll in Medicare Parts A and B immediately. They can continue coverage with COBRA for up to eight months without enrolling in Medicare. If they don’t enroll in Medicare before the eight months are up, they’ll pay a financial penalty for the rest of their lives. 
• If your Medicare-eligible dependent enrolls in COBRA coverage, they should also enroll in Medicare Part D prescription drug coverage within 63 days of your last day at Workday. If they don’t, they’ll pay a financial penalty for the rest of their lives.

• You can enroll everyone on your plan in COBRA continuation coverage for up to 18 months unless someone on the plan becomes eligible for Medicare sooner. 
• COBRA coverage ends upon enrollment in Medicare, but not for the whole family. For instance, if your spouse enrolls in Medicare, they’ll lose COBRA coverage while other covered dependents remain covered. 
• Your dependent can enroll in COBRA even if you choose not to. Conversely, you can enroll in COBRA without enrolling dependents. Or, the whole family can enroll.

• You can enroll that person in COBRA coverage. Medicare remains their primary coverage; COBRA becomes their secondary coverage. 
• If you don’t enroll your dependent in COBRA coverage, they can enroll in a private Medigap plan to bridge the gap between Workday and Medicare coverage. This option is available to your dependent beginning 60 days after your dependent loses Workday coverage, and they’re guaranteed to be approved for coverage for six months. Medigap isn’t an option for your dependent if they’re enrolled in a Medicare Advantage plan.