Key Takeaways
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If you’re still working past age 65, when and how you enroll in Medicare depends on the size of your employer and the type of coverage you currently have.
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Delaying Medicare Part B or Part D without proper employer coverage could lead to permanent late enrollment penalties and gaps in coverage.
Understanding Medicare Eligibility at 65
You become eligible for Medicare at age 65, regardless of your employment status. The Initial Enrollment Period (IEP) begins three months before your 65th birthday, includes your birth month, and extends for three months afterward—a seven-month window in total.
However, if you’re still working and covered by an employer health plan, you may be able to delay some parts of Medicare without penalties. The rules depend largely on whether your employer has 20 or more employees.
Employer Size Matters
If Your Employer Has 20 or More Employees
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You can delay Medicare Part B and Part D without penalty if you’re covered by your employer’s group health plan.
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Your employer coverage is considered creditable for both Part B and Part D.
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When you retire or lose your employer coverage, you’ll get an eight-month Special Enrollment Period (SEP) to sign up for Part B and a two-month SEP for Part D.
If Your Employer Has Fewer Than 20 Employees
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Medicare becomes primary, and your employer coverage becomes secondary.
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In this case, you’re strongly advised to enroll in both Part A and Part B at age 65 to avoid gaps in coverage.
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Failure to enroll could mean your claims are denied or only partially paid.
Should You Enroll in Medicare While Working?
This decision isn’t always simple. You need to evaluate:
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Whether your employer coverage is creditable
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What your costs are under each option
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Whether coordination of benefits will work in your favor
In many cases, enrolling in Medicare Part A is recommended, as it is premium-free if you or your spouse paid Medicare taxes for 40 quarters. However, if you have a Health Savings Account (HSA), you should delay Part A as well.
HSA and Medicare: A Common Pitfall
If you’re contributing to a Health Savings Account and enroll in Medicare Part A or B, you must stop contributing to the HSA. IRS rules prohibit HSA contributions once Medicare coverage begins.
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To avoid penalties, stop HSA contributions at least six months before applying for Medicare.
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Medicare Part A coverage is retroactive for up to six months (but not before your 65th birthday), which can create tax issues.
How the Special Enrollment Period Works
If you delay Medicare because you’re still working, you qualify for a Special Enrollment Period (SEP) when your employment or employer coverage ends. During this SEP, you can:
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Enroll in Part B within eight months without a penalty.
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Enroll in Part D within two months to avoid late penalties.
Keep in mind:
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The SEP starts the month after your employment or coverage ends, whichever comes first.
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If you miss your SEP, you’ll have to wait until the General Enrollment Period (January 1 to March 31) and pay a late enrollment penalty.
Late Enrollment Penalties Can Last a Lifetime
If you delay enrollment in Medicare Part B or Part D without creditable coverage, you may face:
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A Part B penalty of 10% for each full 12-month period you were eligible but didn’t enroll. This penalty applies for as long as you have Part B.
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A Part D penalty of 1% of the national base premium for each month you were without creditable prescription drug coverage. This too applies for life.
Coordination of Benefits: Who Pays First?
Medicare has rules about who pays first when you have more than one type of coverage:
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If your employer has 20 or more employees, your employer plan pays first, and Medicare is secondary.
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If your employer has fewer than 20 employees, Medicare pays first, and your employer plan is secondary.
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If you have retiree coverage or COBRA, Medicare always pays first.
If you don’t enroll in Medicare Part B when required and it’s supposed to be your primary insurance, your employer coverage might not pay anything.
What About COBRA or Retiree Coverage?
COBRA and retiree coverage do not count as creditable coverage for delaying Part B. If you’re offered COBRA when you leave a job:
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Enroll in Medicare Part B first, then elect COBRA if needed.
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COBRA without Part B may leave you without any primary insurer, resulting in denied claims.
Similarly, retiree coverage is not a substitute for Medicare. Enroll in Medicare first to ensure full benefits.
What to Know About Medicare Part D While Working
Prescription drug coverage through your employer must be creditable for you to safely delay Medicare Part D. Each year, your employer must provide a Notice of Creditable Coverage.
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If you don’t receive this notice or the coverage isn’t creditable, you should enroll in Medicare Part D when you’re first eligible.
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You only have 63 days after losing creditable drug coverage to enroll without a penalty.
How to Apply for Medicare After 65
If you delayed Medicare due to active employment and are ready to enroll:
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Apply online through the Social Security Administration.
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Submit CMS Form 40B (Part B enrollment) and CMS-L564 (Request for Employment Information).
These documents confirm your eligibility for a penalty-free SEP.
When You Might Still Want Medicare While Working
Even with employer coverage, some people choose to enroll in:
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Part A, because it’s premium-free and can coordinate with hospital benefits.
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Part B, if their employer coverage is expensive or has high deductibles.
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Part D, if employer drug coverage is limited or non-creditable.
Compare benefits carefully. Medicare can sometimes be more affordable than employer plans, especially in retirement-focused companies with higher premiums.
Timing Mistakes Can Be Costly
Common mistakes to avoid:
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Assuming your employer coverage is automatically creditable.
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Delaying Medicare Part B with a small-employer plan.
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Enrolling in COBRA without first enrolling in Medicare.
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Contributing to an HSA while signed up for Medicare.
Each of these missteps can lead to:
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Penalties that never go away
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Out-of-pocket medical bills
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Delays in access to care
Preparing Ahead to Avoid Surprises
Here’s how to make sure you’re ready:
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6-12 months before turning 65: Review your employer plan and check creditable status.
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3-6 months before 65: Speak with your HR department and request documentation.
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During IEP: Make a decision on whether to enroll or delay Medicare.
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If delaying: Prepare for SEP paperwork when employment ends.
Smart Planning for Medicare While Working
As more adults work past 65 in 2025, understanding your Medicare responsibilities and timing is critical. Even one delay or wrong assumption can create penalties or medical bills.
Take the time to assess your current coverage and coordinate with Medicare based on your employer size and benefits. Don’t guess—verify with your employer and get it in writing.
If you’re unsure, reach out to a licensed agent listed on this website. They can help you understand your rights and responsibilities, compare options, and enroll at the right time to avoid penalties and coverage gaps.
