Key Takeaways

• If you’re working past 65, your Medicare enrollment requirements and timelines may shift depending on your employer coverage.

• Failing to enroll at the right time—even while still employed—can result in penalties and gaps in coverage.

Turning 65 Doesn’t Mean You Must Enroll—But You Might Need To

When you reach age 65, you become eligible for Medicare. However, if you’re still working and covered by an employer health plan, your path forward isn’t automatic. Whether you should enroll in Medicare right away or delay parts of it depends on the size of your employer, the kind of coverage you have, and whether your employer plan is considered “creditable” under Medicare rules.

Understanding Your Medicare Enrollment Timeline

Medicare’s standard Initial Enrollment Period (IEP) begins three months before the month you turn 65, includes your birthday month, and ends three months after. That’s a total of seven months. During this time, you’re allowed to sign up for Medicare Parts A and B.

But if you’re working and covered by a group health plan through your employer—or your spouse’s employer—you may qualify for a Special Enrollment Period (SEP). This SEP allows you to delay enrolling in Part B (and Part D) without facing late enrollment penalties, provided your coverage is creditable and you enroll within 8 months of losing that coverage.

Missing that SEP can trigger late penalties that last for life.

Employer Size Matters—A Lot

One of the most overlooked aspects of working past 65 is how your employer’s size affects your Medicare responsibilities.

If Your Employer Has 20 or More Employees

• Your group health plan pays first (primary), and Medicare is secondary.

• You can choose to delay Part B without penalty.

• Part A can still be free (if you or your spouse paid Medicare taxes for at least 40 quarters), so many people enroll in Part A and delay only Part B.

If Your Employer Has Fewer Than 20 Employees

• Medicare pays first, and your employer insurance pays second.

• You must enroll in Medicare Parts A and B at 65 to avoid coverage gaps.

Even if you think you’re covered, if your employer is small, you could be left with unpaid medical bills if you fail to enroll in Medicare.

Should You Take Part A While Still Working?

Part A is usually premium-free if you’ve worked at least 10 years (or 40 quarters) in Medicare-covered employment. So, it may seem harmless to enroll while keeping your employer coverage. But it’s not always that simple.

Enrolling in Part A activates certain restrictions. For instance:

• You can’t contribute to a Health Savings Account (HSA) once you’re enrolled in any part of Medicare, including Part A.

• Part A coverage begins up to six months retroactively (but not earlier than your 65th birthday or retirement), which can complicate HSA contributions if you’re not careful.

If you actively contribute to an HSA, talk to your HR department and consider delaying Part A until you retire.

What Happens When You Retire After 65

Once you leave your job, your employer health coverage usually ends. That’s when the clock starts ticking.

You have an 8-month Special Enrollment Period to enroll in Medicare Part B without penalty. This SEP starts the month after your employment ends or your group health coverage ends—whichever comes first.

Important note: Your SEP for Medicare Part D (prescription drug coverage) is only 2 months long after losing creditable drug coverage. If you delay signing up for Part D beyond this point, you could face a lifelong late enrollment penalty.

That’s why it’s critical to understand the difference in deadlines for Part B and Part D.

COBRA Coverage and Medicare: A Common Misstep

Many people assume COBRA coverage satisfies Medicare requirements, but it does not.

COBRA allows you to keep your employer insurance temporarily after you retire, but it doesn’t count as creditable coverage to delay Medicare enrollment. If you rely on COBRA and delay signing up for Part B, you could face penalties and even go without coverage for several months.

To avoid this issue, you should sign up for Medicare as soon as your active employment ends, regardless of whether you’re taking COBRA.

What About Spouses and Dependents?

If you’re working past 65 and your spouse or dependents rely on your employer plan, enrolling in Medicare could change their eligibility.

• Your Medicare enrollment doesn’t automatically cover your spouse.

• If you drop employer coverage to switch to Medicare, your dependents could lose their health insurance.

• Consider coordinating your transition to Medicare with your spouse’s coverage options, especially if they’re under 65.

Evaluate their access to COBRA, private insurance, or coverage through their own employer before making any changes.

How Delaying Medicare Affects Your Costs

While delaying Medicare can make sense while working, missing your deadlines later on can lead to higher costs. Here’s how penalties are applied:

• Part B penalty: 10% increase in premiums for every 12 months you delay enrollment without creditable coverage.

• Part D penalty: 1% increase in monthly premiums for every month you delay past the 2-month SEP.

These penalties last for as long as you have Medicare, so failing to enroll on time can become very expensive over the years.

Medigap Considerations When You Enroll Late

When you first enroll in Medicare Part B, you enter a 6-month Medigap Open Enrollment Period. During this time, you have a guaranteed right to buy any Medigap policy sold in your state, regardless of your health status.

If you delay Medicare Part B, your Medigap enrollment window gets delayed, too—but once it opens, you only get one shot at guaranteed acceptance. After that, insurers may deny coverage or charge more based on pre-existing conditions.

If you’re planning to get Medigap coverage, consider timing your Part B enrollment to align with your coverage needs.

Key Steps to Take Before Delaying Medicare

To avoid costly mistakes and gaps in coverage, take these actions if you’re considering working past 65:

• Confirm your employer’s size: Ask HR whether your company has 20 or more employees.

• Verify your plan’s Medicare status: Ensure your group health coverage is creditable for both Parts B and D.

• Decide on Part A carefully: Consider HSA implications before enrolling.

• Plan for dependents: Review how your enrollment affects your family.

• Know the SEP timelines: Set calendar reminders for the 8-month (Part B) and 2-month (Part D) windows.

• Document your coverage: Keep proof of employer coverage in case Medicare requires it later.

Don’t Assume—Confirm Your Coverage Every Year

Medicare rules don’t change often, but employer plans do. A plan that was creditable last year may no longer be this year. If your employer’s benefits change, or if your company shrinks below the 20-employee threshold, your Medicare situation could change with little warning.

Review your coverage annually and request documentation confirming whether your employer plan remains creditable. This documentation is especially important if you delay Part B or Part D.

The Rules Are Clear—But the Timing Is Tricky

Working past 65 can make good financial sense. But it also introduces more complexity into your Medicare decisions. Small missteps—like assuming your plan is creditable or forgetting when your SEP starts—can create lasting financial consequences.

You don’t have to figure it out alone. A licensed agent listed on this website can help you review your situation, compare timelines, and make confident decisions about your Medicare options.