Still Working at 65? What to Do About Medicare and Employer Coverage
The size of your employer changes the answer
If your employer has 20 or more employees, your group plan generally stays primary and you can usually delay Part B without penalty while you keep working. If your employer has fewer than 20 employees, Medicare generally becomes primary at 65, and skipping enrollment can leave you effectively uninsured for the portion Medicare would have paid. This one fact decides most of the rest.
Part A now, or not?
Many people enroll in premium-free Part A at 65 even while working. The big exception is anyone contributing to a Health Savings Account: you cannot contribute to an HSA while enrolled in any part of Medicare, and Part A enrollment can be backdated up to six months. If you have an HSA, plan your last contribution accordingly before enrolling.
Your Special Enrollment Period when you stop working
When your employment or your group coverage ends, whichever comes first, you generally get an eight-month Special Enrollment Period to enroll in Part B without penalty. Two cautions: the drug coverage clock is shorter, and COBRA or retiree coverage does not count as active employer coverage for these rules.
If your spouse is on your plan
Your Medicare decision is a household decision. If a younger spouse relies on your employer coverage, moving yourself to Medicare can leave them needing their own plan until they reach 65. Sometimes the numbers still favor the switch; sometimes they clearly do not. Run the comparison for the household, not just for the person turning 65.
How to decide without guessing
Compare what your group plan costs and covers against what your Medicare combination would cost and cover, including your spouse’s situation if they are on your plan. Sometimes keeping the group plan wins; sometimes moving to Medicare does. The penalties you are stepping around are described in our penalties guide, and your enrollment dates live in the month-by-month timeline.
A simple pre-retirement checklist
- 60 to 90 days before your last day: confirm in writing that your coverage counts as creditable for both medical and drug purposes.
- HSA holders: plan your final contribution around Part A’s up-to-six-month backdating.
- Enrollment: line up Part B so it starts when the group coverage ends, not after a gap.
- Skip the COBRA trap: decide about Medicare first, because COBRA does not pause the penalty clocks.
Common questions
Can I delay Medicare and keep contributing to my HSA?
Yes, if you delay all parts of Medicare and your employer coverage allows it. Once you enroll in any part of Medicare, HSA contributions must stop, and Part A backdating can reach up to six months behind your application.
Does COBRA count as employer coverage for the Special Enrollment Period?
No. COBRA is not active employment coverage under these rules, which surprises a lot of people at the worst possible time.
Keep reading
Medicare BasicsMedicare Late Enrollment Penalties: How They Happen and How to Avoid ThemMedicare BasicsTurning 65 in Florida: Your Month-by-Month Medicare TimelineMedicare BasicsMedicare Advantage vs. Supplement: Which Fits You?
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