What to Do With Medicare If You’re Still Working Past 65

Turning 65 while you’re still working doesn’t automatically mean you need to enroll in Medicare right away — but it doesn’t automatically mean you can safely wait, either. The answer depends on one specific number: how many employees your employer has.

Getting this wrong in either direction has real consequences — either a permanent premium penalty, or paying for Medicare coverage you didn’t actually need yet. Here’s how to know which situation you’re in.

The Employer Size Rule That Decides Everything

Whether you can delay Medicare without a penalty comes down to whether your employer has 20 or more employees. This single number determines which coverage pays first (your employer plan or Medicare) and whether the standard enrollment timeline even applies to you.

If Your Employer Has 20 or More Employees

Your group health plan pays first, and Medicare would pay second if you enrolled. Because of that order, you’re generally allowed to delay Part B — and often Part A if you or your spouse prefer to keep contributing to an HSA, more on that below — for as long as you remain actively employed and covered by that plan, without a late enrollment penalty. Many people in this situation still enroll in Part A alone, since it’s premium-free for most people who’ve paid Medicare taxes for at least 40 quarters, but hold off on Part B until employment ends.

The Comparison Most People Never Actually Run

Delaying Part B to keep your employer plan is the default assumption for a lot of people, but it’s worth actually running the numbers rather than assuming your employer coverage is automatically the better or cheaper option. We regularly find that Medicare, paired with a strong Medicare Supplement plan, offers genuinely broader coverage at a lower total cost than a typical employer group plan once you account for your share of the premium, the deductible, and coinsurance — especially compared to plans that have gotten more expensive for employees over the past few years. When that’s the case, enrolling in Medicare and dropping your employer health plan entirely, while you continue working, is a completely legitimate option worth comparing side by side rather than dismissing out of hand.

The real question in that scenario usually isn’t about you at all — it’s about anyone else depending on that employer plan. If you have a spouse who isn’t yet 65, or other dependents currently covered under your employer plan, dropping it means they need coverage somewhere else, since Medicare only covers you personally. If your spouse or dependents aren’t already covered another way — through their own employer, for instance — that’s exactly the kind of situation we help sort out at the same time, comparing your Medicare Supplement options against individual and family health insurance for the people in your household who aren’t yet Medicare-eligible.

If Your Employer Has Fewer Than 20 Employees

Medicare becomes the primary payer the moment you turn 65, regardless of your employer coverage. In this situation, you generally need to enroll in Medicare during your Initial Enrollment Period even while still working, since your employer plan effectively becomes secondary and may not pay much at all on its own without Medicare in place first. This is one of the more common mistakes we see — someone assumes “I have coverage through work” settles the question, without realizing employer size changes the answer entirely.

The COBRA and Retiree Coverage Trap

This is genuinely the single most consequential misunderstanding in this entire topic. COBRA continuation coverage and retiree health coverage are not considered active employment coverage under Medicare’s rules, even though COBRA is literally the same plan you had while working. That means neither one extends your enrollment window. Your 8-month Special Enrollment Period begins the moment your active employment or employer group coverage ends — not when COBRA runs out, and not when retiree coverage ends. Someone who elects COBRA after retiring and assumes they have until COBRA expires to sign up for Medicare can miss their real window entirely and face a permanent late enrollment penalty as a result.

The HSA Conflict Most People Don’t See Coming

If you or your spouse are still contributing to a Health Savings Account, this matters more than most people realize. Enrolling in any part of Medicare — including Part A alone, even though it’s premium-free — ends your HSA contribution eligibility immediately. The complication is timing: once you do enroll, Part A coverage is applied retroactively up to 6 months (but never earlier than the month you turned 65), which means contributions made during that retroactive window can become excess contributions after the fact, even if they were made in good faith at the time.

The safe approach: stop HSA contributions at least 6 months before you actually plan to enroll in Medicare, so the retroactive Part A start date never overlaps with a contribution you already made. This is exactly the kind of detail worth planning around rather than discovering after the fact.

Your 8-Month Special Enrollment Period, in Practice

Once active employment or employer group coverage genuinely ends — whichever happens first — you get 8 months to enroll in Part B without a late enrollment penalty. That penalty, once it applies, adds 10% to your Part B premium for every full 12-month period you could have enrolled but didn’t, and it lasts for as long as you have Part B, not just for a year or two. Marking the actual end date of your active coverage, not a COBRA or retiree coverage end date, is the single most important number to get right here.

What About Part D While You’re Still Working?

Part D has its own, separate late enrollment penalty, but it works differently — it depends on whether your employer drug coverage counts as “creditable,” meaning it’s expected to pay at least as much as standard Medicare drug coverage. Your employer is required to tell you this in writing each year. If your coverage is creditable, you can generally delay Part D the same way you delay Part B, without a penalty, and you’ll get your own separate enrollment window once that coverage ends.

What “Primary” and “Secondary” Actually Mean for Your Bills

“Primary payer” simply means whichever coverage pays a medical bill first, up to its coverage limits, before anything gets passed to the secondary payer. When your employer plan is primary (employer with 20 or more employees), Medicare — if you’re enrolled — only picks up whatever’s left afterward, which is exactly why many people in that situation don’t bother enrolling in Part B yet. When Medicare is primary instead (employer with fewer than 20 employees), your employer plan may pay very little on its own, since it’s designed to work alongside Medicare rather than in front of it. Providers and billing departments generally handle this coordination automatically once both coverages are on file, but it only works correctly if you’re actually enrolled in the coverage that’s supposed to be primary.

When Retirement Is Actually Set, Not Just Planned

It’s worth starting this conversation before your last day of work, not after. Enrolling in Part B can take a few weeks to process, and coordinating the exact date your employer coverage ends against the date Medicare coverage begins matters more than people expect — a gap of even a few weeks with no active coverage is a real, avoidable risk. We generally suggest starting this conversation 2 to 3 months before your planned last day, once the date is genuinely firm rather than still tentative.

A Client Example

A client turned 65 while still working for a small Cincinnati-area employer with around a dozen employees. She assumed her employer coverage meant Medicare could wait, the same way it had for a friend at a much larger company. Because her employer had fewer than 20 employees, Medicare was actually already primary, and her employer plan was paying very little without it. Once we sorted out the employer-size rule together, she enrolled in Part A and B right away and avoided a penalty that was genuinely just a few months from becoming permanent.

What struck her most wasn’t the paperwork itself, but how differently the advice she’d gotten from a friend applied to her own situation — a reminder that “what worked for someone else” isn’t always a safe shortcut here, since the employer-size rule alone can flip the entire answer.

What to Bring When You’re Ready to Talk

• Roughly how many employees your employer has
• Whether your employer drug coverage has been described as “creditable” in any notice you’ve received
• Whether you or your spouse are still contributing to an HSA
• Your realistic retirement timeline, even if it’s not fully settled yet

Frequently Asked Questions

How do I find out how many employees my company has for this purpose?

Your HR or benefits department can confirm this directly, and it’s worth asking specifically rather than guessing based on how the office feels day to day — companies with multiple locations sometimes have more employees than any one office suggests.

Can I enroll in Part A only and keep working with my employer coverage?

Often yes, if your employer has 20 or more employees, since Part A is premium-free for most people. Just be aware this ends HSA contribution eligibility immediately, which matters if you or your spouse are still contributing to one.

Does COBRA really not give me extra time to enroll in Medicare?

Correct — this is the single most common mistake in this entire topic. Your Special Enrollment Period starts when active employment or employer coverage ends, not when COBRA or retiree coverage ends, even though those may continue for months afterward.

What happens if I get this wrong?

A missed Part B window outside a valid Special Enrollment Period generally means waiting for the next General Enrollment Period and facing a permanent 10%-per-year premium penalty for as long as you have Part B. It’s genuinely worth confirming your specific situation before assuming either way.

Is there a cost to sort this out with your team before I retire?

No. There’s no cost and no obligation to talk through your specific employer coverage and timeline, whether retirement is imminent or still a couple of years out.

Still working past 65 in the Cincinnati area? See how to actually apply for Medicare, or talk with our local Medicare agent team — there’s no cost and no obligation.