Still Working at 65? Here’s What Medicare Actually Requires

Every year around this time, I talk to people turning 65 who are still working full time, still covered by a group health plan, and completely convinced they have to sign up for Medicare right now or something terrible is going to happen. Usually, neither one is true. But the details matter, and getting them wrong can be an expensive mistake to fix later. So let’s walk through it in plain English.

The One Question That Decides Almost Everything

Before we talk about Parts A, B, or anything else, there’s one question that shapes your whole decision: how many employees does your company have?

If your employer has 20 or more employees, your group health plan is considered your primary coverage and Medicare would only pay second. In that case, you generally have the option to delay enrolling in Medicare Part B without a penalty, for as long as you stay covered by that group plan.

If your employer has fewer than 20 employees, Medicare typically becomes primary the moment you turn 65, whether you enroll or not. Your group plan may not pay claims the way you expect if you haven’t signed up for Medicare Part A and Part B on time. This is the situation where people get burned the most, because it feels like nothing has changed at work, but the coverage math changed the day you turned 65.

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Part A Is Usually a No-Brainer… With One Big Exceptions

For most people who’ve worked and paid into Medicare for at least ten years or 40 quarters, Part A comes at no premium cost, so there’s rarely a reason to turn it down. Most people just let it start automatically at 65.

The exception is a Health Savings Account. If you’re still contributing to an HSA through a high-deductible health plan at work, enrolling in Medicare Part A can cause a problem. Part A enrollment can be retroactive up to six months, and you can’t contribute to an HSA once you’re enrolled in any part of Medicare. If you keep contributing during that lookback window without realizing it, you can end up with a tax problem. If this applies to you, this is worth a real conversation before you do anything, not a guess.

Part B: The One Worth Slowing Down For

This is where I see the most confusion. If your employer coverage counts as “creditable” (meaning it’s considered at least as good as Medicare) and your employer has 20 or more employees, you can typically delay Part B and pick it up later without a late enrollment penalty, as long as you enroll within the right window once that coverage ends.

But not every employer plan is creditable, and not every HR department can tell you clearly whether yours is. Retiree coverage and small-employer plans are the two situations I’d never assume about. This is genuinely worth confirming in writing before you decide to wait.

The Clock Starts the Moment the Job (or the Coverage) Ends

Once you leave that job, or once your group coverage ends, whichever comes first, you get an 8-month Special Enrollment Period to sign up for Medicare Part B without a penalty. COBRA and retiree coverage do not extend that window. This trips people up constantly, because COBRA feels like continuous coverage, but it doesn’t count for Medicare’s purposes.

Miss that 8-month window and you could be looking at a gap in coverage until the next enrollment period opens, plus a late enrollment penalty that can follow you for as long as you have Medicare. It’s one of the most avoidable mistakes I see, and also one of the most permanent.

So What Should You Actually Do?

Honestly, there isn’t a single right answer here that applies to everyone. It depends on the size of your employer, whether your coverage is creditable, whether you’re contributing to an HSA, and what your plans are for the next few years. That’s exactly why this isn’t a “look it up and guess” kind of decision.

If you’re approaching 65 and still working, or you know someone who is, I’m happy to walk through your specific situation with you, at no cost to you. Sometimes the answer is “don’t touch anything yet,” and sometimes it’s “you need to enroll now.” Either way, it’s worth twenty minutes to get it right instead of finding out the hard way.

New to Medicare? Let’s Start the Conversation

If you’re turning 65 or helping a parent navigate Medicare for the first time, you don’t have to figure it
out from a stack of mailers. Worthen Insurance Group is a local, independent agency right here in
Friendswood, and our licensed agents will walk you through it — plainly, patiently, and in the right order.