If you’re still working at 65, when you need Medicare depends on your employer’s size. At companies with 20 or more employees, your work coverage usually pays first, so you can often delay Part B without a penalty. At companies with fewer than 20 employees, Medicare usually pays first, so you generally need Parts A and B at 65.
Getting this wrong can mean coverage gaps or a lifelong penalty. Here’s how to decide.
If your employer has 20 or more employees
Your group health plan is your primary coverage. You can usually delay Part B, and many people still sign up for Part A because it’s free for most.
When you or your spouse stop working, or the coverage ends, you get an 8-month Special Enrollment Period to sign up for Part B with no penalty. The window starts when the job or the coverage ends, whichever comes first.
If your employer has fewer than 20 employees
Medicare is your primary coverage, and your work plan pays second. If you skip Part B, your work plan may not pay for care Medicare would have covered. Most people at small employers should enroll in Parts A and B when first eligible.
Should you sign up for Part A while working?
Part A is free for most people, so many workers take it at 65. There’s one big exception. You can’t contribute to a Health Savings Account once you have any part of Medicare. Part A can start up to 6 months before the month you apply, so stop HSA contributions 6 months before you enroll.
COBRA and retiree coverage don’t count
COBRA isn’t coverage from current work. It won’t let you delay Part B without a penalty. If you’re eligible for Medicare, sign up for Part B when your job ends, even if you take COBRA.
Most retiree health plans pay after Medicare. They usually require you to have Parts A and B.
Paperwork you’ll need when you retire
To sign up for Part B later without a penalty, you’ll usually file two forms with Social Security:
- CMS-40B, the Application for Enrollment in Medicare Part B
- CMS-L564, the Request for Employment Information, which your employer fills out to confirm your coverage
Ask HR for the L564 a few months before you retire so there’s no delay.
What about your spouse?
Medicare covers individuals, not families. If your spouse is on your work plan and is under 65, they’ll need their own coverage when you leave.
Plan your switch with a local broker
Erie Medicare Associates helps people time their move from work coverage to Medicare so there’s no gap and no penalty. Employers can also use our free HR Med-Ed Program for their teams. Planning to retire? Schedule a free consultation or call (716) 319-4613.
Frequently asked questions
Can I delay Medicare if I’m still working? Yes, if your employer has 20 or more employees and you have group coverage through current work. You can usually delay Part B without a penalty.
How long do I have to sign up for Medicare after I retire? You have 8 months from when your job or work coverage ends, whichever comes first, to enroll in Part B without a penalty.
Does COBRA count as coverage for Medicare? No. COBRA doesn’t let you delay Part B. Sign up for Part B when your job ends to avoid a late penalty.
