Working Past 65: How Medicare Works With Your Employer Coverage

Do you need Medicare if you’re still working at 65?

Not always. If you have health coverage through your own or your spouse’s current job, you may be able to delay some or all of Medicare without a penalty. Whether that’s wise depends on your employer’s size, what your plan costs, and whether you have a health savings account.

Many people sign up for premium-free Part A at 65 because it costs nothing if you have 40 quarters of Medicare-taxed work. Part B is different. It has a monthly premium, $202.90 in 2026, so paying for it while your employer plan covers you well may not make sense. Your decision on Part B is usually the one that needs the most care.

The catch is getting the details right. Signing up late without qualifying coverage can lead to a lifelong Part B penalty, and a gap in coverage can leave you paying medical bills on your own. Our enrollment window tool can help you map out your Initial Enrollment Period and other key dates before you decide.

It also helps to compare costs, not just rules. Some employer plans have high deductibles or expensive family premiums, and Medicare with a supplement or Medicare Advantage plan may cost less for you. Others offer rich benefits that Medicare can’t easily match. Look at premiums, deductibles, drug costs and your doctors before choosing a path.

The 20-employee rule

The size of the employer matters most. If the employer providing your coverage has 20 or more employees, the group plan generally pays first and Medicare pays second. In that case, you can usually delay Part B without a penalty and enroll later.

If the employer has fewer than 20 employees, Medicare generally becomes the primary payer once you’re eligible. The employer plan may pay very little until you have Parts A and B. Ask your benefits administrator how the plan works with Medicare before you skip Part B. Get the answer in writing if you can, and keep it with your records.

The same idea applies to coverage through a working spouse. What counts is that the coverage comes from current employment, either yours or your spouse’s. A plan from a job that has ended doesn’t qualify, even if the benefits look the same. The coverage must also be a group health plan, not an individual policy.

HSAs and Medicare: when contributions must stop

If you have a health savings account, timing matters even more. Once you’re enrolled in any part of Medicare, including Part A, you can no longer contribute to an HSA. You can still spend the money already in it on qualified medical expenses.

Here’s the part that catches people off guard: when you sign up for Part A after 65, it can be made retroactive for up to six months, though not earlier than the month you turned 65. Contributions made during those backdated months may cause tax problems. Many people stop contributing about six months before they plan to enroll.

Also know that starting Social Security retirement benefits after 65 automatically enrolls you in Part A. If you want to keep funding your HSA, you may need to hold off on Social Security too. For HSA tax rules, check IRS.gov or ask your tax professional. Kris can explain the Medicare side, but she is not a tax adviser.

Why COBRA and retiree coverage don’t protect you

COBRA lets you keep your former employer’s plan for a while after you leave. It can be useful, but for Medicare purposes it does not count as coverage based on current employment. Retiree health plans don’t either. Neither one lets you delay Part B without risking a penalty.

If you’re on COBRA and already eligible for Medicare, your Special Enrollment Period clock started when your job ended, not when COBRA ends. Waiting for COBRA to run out could mean missing your window. Then you’d have to use the General Enrollment Period, January 1 to March 31, and possibly pay a penalty.

There’s another wrinkle. Once you have Medicare, COBRA generally pays second, so it may not cover much if you skipped Part B. That can leave you with bills you didn’t expect. If you want COBRA for a spouse or for dental benefits, it can still play a role, but get your Medicare in place first.

Your 8-month Special Enrollment Period

When your job or group coverage ends, you get an 8-month Special Enrollment Period to sign up for Part B. The window starts the month after your employment or group coverage ends, whichever happens first. Coverage based on current work must have been in place to use it.

Don’t wait until the last month. If you want your new coverage to line up with the end of your employer plan, apply a month or two before your last day. That gives Social Security time to process your paperwork and helps you avoid a gap. You can choose a Part B start date that matches the first day after your employer coverage ends. Ask your benefits office exactly when your group coverage stops, since it may run to the end of the month.

Drug coverage has its own timeline. If your employer plan had creditable drug coverage, you generally have 63 days after it ends to join a Part D plan or Medicare drug plan before a penalty may apply. Our Part D penalty calculator shows how that penalty is figured. Keep the creditable coverage notice your employer sends each year, since you may need it as proof.

The forms: CMS-40B and CMS-L564

Signing up for Part B after 65 usually takes two forms. CMS-40B is the Application for Enrollment in Medicare Part B. CMS-L564 is the Request for Employment Information, which your employer fills out to confirm you had group coverage based on current employment.

You can find both forms on CMS.gov, and Social Security offers ways to submit them online, by mail or in person. Details are on SSA.gov. Our forms page also gathers helpful links in one place. If you’re unsure which version of a form to use, Social Security can confirm it before you send anything.

If your employer can’t complete the CMS-L564, Social Security may accept other proof, such as pay stubs showing health premium deductions or insurance records. Keep copies of everything you send, and note the date. That paper trail can protect you if questions come up later. That matters most if Social Security asks about your coverage history years from now.

• CMS-40B: your application for Part B.
• CMS-L564: your employer’s confirmation of group coverage.
• Tip: submit them together so Social Security sees the full picture.

Medigap timing when you retire later

If you plan to buy a Medicare Supplement (Medigap) policy, delaying Part B has a hidden benefit. Your Medigap Open Enrollment Period lasts six months and starts the month you’re 65 or older and enrolled in Part B. During that window, federal rules give you guaranteed-issue rights.

That means if you delay Part B while working, your Medigap window waits for you too. Start Part B too early and it begins ticking, even if you don’t need a Medigap plan yet. That’s another reason to plan your Part B start date with care and to think about which coverage you’ll want after retirement.

If you lean toward a Medicare Advantage plan instead, your Part B Special Enrollment Period also gives you a window to join one. Either way, line up your Part B start date, your new plan and your drug coverage so they all begin the day your employer coverage ends. A little planning now can prevent weeks of paperwork and phone calls later.

How Kris can help

Kris helps people across northwest Ohio work through exactly this question: keep the employer plan, switch to Medicare, or combine them. She can compare costs, check your drug coverage, and help you line up dates so there’s no gap. She can also walk you through the paperwork so you know what to send and when.

Consultations are no-cost and no-obligation, in person at the Perrysburg office or by phone or video. Bring your employer’s benefits summary and a list of your medications so you can compare side by side. Call (419) 277-8097 or reach out online to schedule a conversation a few months before your last day of work.