Medicare and Working Past 65: When to Enroll and What to Keep

Do you have to sign up at 65?

Not always, and this page is part of our Medicare 101 series for exactly that reason. Your Initial Enrollment Period opens as usual, 3 months before your birthday month through 3 months after it, and many people enroll then. But if you have coverage through your own or your spouse's current job, waiting is often both allowed and sensible. It comes down to two questions: how many people your employer has on staff, and whether that plan pays before or after Medicare. If you are not working, or have no job-based coverage, the ordinary advice applies and you should enroll in your window; our guide to turning 65 walks through that path.

Employer size is the rule that decides everything

This is the fact to establish first, because every other decision follows from it. Medicare calls it coordination of benefits, and it determines which insurer pays a claim first.

• 20 or more employees: The group plan usually pays first and Medicare pays second. This is the situation where delaying Part B is normal and safe.
• Fewer than 20 employees: Medicare usually pays FIRST and the group plan pays second. If you skip Part B here, the employer plan may pay very little or nothing for care Medicare would have covered.
• Under 65 through disability: The threshold is 100 employees, not 20. At 100 or more, the group plan usually pays first.
• Get it in writing: Ask your benefits office to confirm in writing how the plan works alongside Medicare after 65, before you decide anything.

Part A while you work

Part A is hospital insurance, and most people pay no premium for it because they or a spouse paid Medicare taxes for at least 10 years. Because it is usually free, many workers take it at 65 while keeping their job plan, since it can pick up some hospital costs the group plan leaves. If you are already drawing Social Security you are enrolled in Part A automatically at 65 and cannot decline it without repaying those benefits. There is one significant exception, covered below. If you do not have enough quarters, buying Part A costs $311 to $565 a month.

The health savings account trap

Here is the mistake that costs the most, and it has nothing to do with your health plan. Once ANY part of Medicare starts, including premium-free Part A, you can no longer contribute to a health savings account. Worse, when you sign up for Part A after 65 it can backdate up to 6 months, though never before the month you turned 65, and contributions made during those retroactive months count as excess and get taxed. The practical rule is to stop contributing about 6 months before you intend to enroll. Money already in the HSA stays yours and can still be spent on qualified expenses, including Medicare premiums. The tax treatment is detailed enough that it is worth a conversation with a tax professional rather than a guess.

Part B while you work

Part B covers doctor visits, outpatient care, lab work, equipment and preventive services, and unlike Part A almost everyone pays a monthly premium, $202.90 as the 2026 standard amount. Higher earners pay an income-related monthly adjustment amount (IRMAA) on top, so they pay more through IRMAA, which in 2026 adds between $81.20 and $487.00 a month and is based on your income from 2024. Because Part B costs real money every month, people whose group plan pays first often delay it, and that is fine as long as you follow the rules for picking it up later.

Drug coverage while you work

Most large employer plans include drug coverage, and if yours is creditable, meaning it is expected to pay at least as much as standard Medicare drug coverage, you can delay Part D with no late enrollment penalty, and our Part D page sets out the limits that apply once you do join. Your plan sends a notice each year saying whether it is creditable. Keep every one of them, because they are the evidence if the penalty is ever applied wrongly. Go 63 days or more without creditable coverage after your Initial Enrollment Period and the penalty is 1% of the national base beneficiary premium, $41.33 for 2027, for every full month uncovered, added for as long as you have Part D. When employer drug coverage ends you get a 2-month window to join a Part D plan.

When you stop working: your Special Enrollment Period

If you delayed Part B because of coverage from current employment, this Special Enrollment Period (SEP) is the window that lets you enroll without paying more. Getting the start date right matters more than people expect, because miss it and your next chance is the General Enrollment Period in the new year. You can apply online with the Social Security Administration, by post or by phone, using forms CMS-40B and CMS-L564.

• While still covered: You can sign up any time you still have coverage from current employment.
• Then 8 months: Counted from when the job ends or the group coverage ends, whichever comes FIRST.
• No gap if you are prompt: Sign up while still covered, or in the first full month after, and coverage can start straight away.
• Two forms: CMS-40B to apply for Part B, and CMS-L564, which your employer completes to prove the coverage dates.
• The clock is the job, not the paperwork: The 8 months start when employment or coverage ends, not when your last paycheck lands or HR sends a letter. Put that date in a calendar.

COBRA and retiree coverage do not count

This catches people constantly, and it is worth being blunt about. Neither COBRA nor retiree benefits are coverage based on current employment, whatever they cost or however good they are. Two consequences follow. First, neither gives you a Special Enrollment Period later: your 8 months started when the job ended, and it runs while you are on COBRA. Second, if you are 65 or over and on COBRA, Medicare usually pays first, so delaying Part B can leave very large gaps in what is actually covered, on top of the penalty. If you are retiring, plan to take Part B around when the job ends even if you elect continuation coverage. COBRA can still be worth having for a spouse under 65, or for dental and vision.

If you are self-employed or buy your own plan

People who work for themselves, or buy an individual plan through the Marketplace, often assume the same waiting rules apply. They do not. An individual plan is not group coverage from current employment, so it gives you no Special Enrollment Period later. In most cases you should enroll in Parts A and B during your Initial Enrollment Period. There is a second consequence worth knowing before you decide: once you have Medicare you generally cannot continue receiving premium tax credits to reduce the cost of a Marketplace plan. With no employer, 65 is simply your deadline.

Choosing coverage once you do retire

When you leave the group plan you choose how your Medicare coverage is put together, from one of two standard routes: Original Medicare with a stand-alone Part D plan and optionally a supplement policy, or a single plan bundling hospital, medical and usually drug coverage together. One piece of timing is easy to overlook. Your 6-month Medigap open enrollment window starts the first month you are 65 or older AND have Part B, so delaying Part B delays that window too. That is usually an advantage, because it means the window opens when you actually need the cover rather than while you are still on the employer plan. See how Medicare Supplement plans work, compare Medicare Advantage options, and read our Medicare Advantage vs. Medigap guide before deciding.

A checklist for working past 65

Most of this is information gathering, and all of it is easier before your window opens than after.

• Ask the headcount: How many employees, and is the plan primary after 65? In writing.
• Ask about the drug coverage: Is it creditable, and save the annual notice.
• Decide on Part A: Usually yes, unless you contribute to an HSA.
• Write down the end date: If you delay Part B, record exactly when the job or coverage ends.
• Gather the forms early: CMS-40B and CMS-L564, about 2 to 3 months before you retire.
• Compare before coverage stops: Look at your Medicare and drug plan options while you still have the group plan.

Common questions

More in Medicare 101

• Turning 65: Your complete guide to starting Medicare
• Medicare Eligibility: Who Qualifies, and When
• How to Enroll in Medicare, Step by Step
• The Parts of Medicare, Explained: A, B, C and D
• Medicare Enrollment Periods: Every Window Explained
• Medicare Late Enrollment Penalties, and How to Avoid Them
• Medicare Costs: What You'll Actually Pay
• Medicare Advantage vs. Medicare Supplement: How to Choose
• Medicare Prescription Drug Coverage: Where It Comes From and How It Works