Working Past 65 and Medicare: When You Can Delay

Do you have to sign up at 65 if you are still working?

Not always. If you have health coverage through a current employer (yours or your spouse's), you can often delay Part B, and the monthly premium that comes with it, without a late penalty. But this is not automatic for everyone: it depends on how many people your employer has, and on your coverage being what Medicare calls creditable. Getting this wrong is one of the most common, and most expensive, Medicare mistakes.

The 20-employee rule: whose plan pays first

The size of the employer decides which coverage is primary, meaning which one pays first:

• 20 or more employees: Your group health plan pays first and Medicare is secondary. You can delay Part B without a late penalty for as long as you have that active coverage.
• Fewer than 20 employees: Medicare usually pays first, so you generally should enroll in Part A and Part B at 65 to avoid gaps in coverage. Confirm with your benefits administrator.
• Always verify: Ask your employer's benefits administrator, in writing, whether your coverage is creditable and who pays first. Do not assume.

Should you take premium-free Part A while working?

Most people enroll in Part A at 65 because it is premium-free (if you have 40 quarters of Medicare-taxed work) and can pay secondary to an employer plan. There is one important exception: if you contribute to a Health Savings Account (HSA), enrolling in any part of Medicare, including Part A, makes you ineligible to keep contributing. Because Part A can back-date up to 6 months when you enroll after 65, stop HSA contributions ahead of your Medicare start date to avoid a tax penalty.

When your job ends: your Special Enrollment Period

Once your employment or the group coverage ends, you get an 8-month Special Enrollment Period to sign up for Part B without a late penalty. Part D drug coverage has its own 2-month window after creditable drug coverage ends. Sign up during these windows to avoid both a gap in coverage and a lifelong penalty.

Do not wait for COBRA or retiree coverage

This trips up a lot of people: COBRA and retiree coverage do NOT count as active employer coverage for delaying Part B, and they do not extend your Special Enrollment Period. Your 8-month window starts when your active employment (or the employer plan) ends, not when COBRA runs out. Enroll in Part B within that window even if you still have COBRA, or you can face a gap and a permanent late-enrollment penalty.

Related articles

• Turning 65: your complete guide to starting Medicare
• When to sign up for Medicare (enrollment periods)
• Medicare late-enrollment penalties, and how to avoid them
• How to enroll in Medicare, step by step

Common questions