Turning 65 and Still Working: Can You Delay Medicare?

You can often delay Medicare Part B without a late enrollment penalty after turning 65 if you have group health insurance through your own or your spouse’s current employment. Part B covers doctor visits and other outpatient care. Delaying without qualifying coverage can lead to a late enrollment penalty, a lasting surcharge on your Part B premium, and can limit when you can enroll. But protection from a late enrollment penalty does not establish that your employer insurance will pay medical bills first while you wait.

Before deciding, confirm whose current job supports the coverage, which insurance pays first, and whether your prescription coverage qualifies for a separate delay. Check Part A, Medicare’s hospital insurance, before making any more health savings account contributions.

Confirm that your insurance is based on current employment

A qualifying employer or union group health plan can let you postpone Part B and enroll later through a Special Enrollment Period, a limited opportunity to sign up outside your first enrollment window. Coverage through a spouse who is still working can qualify even if you have already retired.

COBRA and retiree insurance do not count as coverage based on current employment for this Part B enrollment protection. If your coverage does not qualify, enroll in Part B during your Initial Enrollment Period, explained below, instead of waiting for the job-based Special Enrollment Period. Keeping the same insurer or insurance card after leaving a job does not preserve that protection. Your own current job also does not make a spouse’s retiree plan qualify.

Individual insurance, including a policy bought with an employer stipend, does not provide this protection either. An employer’s SHOP (Small Business Health Options Program) group plan, the Marketplace’s small-business group coverage, is different from an individual Marketplace policy and can qualify. If you are self-employed, confirm that you actually have a qualifying group plan; working for yourself and buying private insurance is not enough.

Ask the benefits administrator to identify the plan type and document your employment and coverage dates. If you are already past 65, have Social Security review that history through your local Social Security office. Starting qualifying coverage now does not automatically erase an earlier period when you should have enrolled.

Find out whether the employer plan or Medicare pays first

The primary payer handles a covered bill first. The secondary payer considers costs left afterward under its own coverage rules. For ordinary employer group coverage at age 65 or older, the usual order is:

• Employer with 20 or more employees: The group plan generally pays first when coverage comes from your or your spouse’s current work. Delaying Part B may be practical if the other enrollment conditions are met.
• Employer with fewer than 20 employees: Medicare generally pays first. The employer plan may calculate its payment as secondary even if you have not enrolled in Medicare, leaving substantial bills for you to pay.
• Multi-employer plan: A plan covering several employers generally pays first if at least one participating employer has 20 or more employees. An approved small-employer exception can change that order for a particular covered person. Ask whether an exception applies to you.

The 20-employee rule concerns payment order; it is not a minimum employer size for the work-based Part B Special Enrollment Period. Someone with a small employer’s qualifying group coverage may have penalty protection yet still need Parts A and B at 65 to avoid unpaid claims.

Get the plan administrator’s written answer to this question: “After I become eligible for Medicare, how will this plan pay hospital and outpatient claims if I do not have Part A or Part B?” Have the administrator confirm the employer-size classification rather than counting only people enrolled in the insurance plan.

This guide addresses Medicare eligibility based on age. The work-based Part B Special Enrollment Period does not apply to Medicare eligibility based on end-stage renal disease. That situation needs a separate enrollment review. Tribal health plans can also follow different payment rules.

Check Part A and your HSA before enrolling

Most people qualify for premium-free Part A through their own or a spouse’s work history paying Medicare taxes; if you are unsure, ask Social Security whether you qualify. If you qualify, you can generally enroll at 65 or later without a Part A late enrollment penalty. If you must pay a Part A premium, ask Social Security about your enrollment period and penalty rules before delaying it. Also confirm whether your employer plan requires Part A for claims to be paid properly.

Check any Medicare welcome notice if you already receive Social Security benefits. Parts A and B may be enrolled automatically. If you qualify to delay Part B, follow the notice’s instructions to decline it. Simply avoiding an application does not prevent automatic coverage, and declining Part B alone does not remove Part A. If you receive Social Security benefits, you generally cannot refuse Part A while keeping those benefits, so plan to end health savings account contributions.

A health savings account, or HSA, has a separate tax rule: Medicare enrollment ends your eligibility for HSA contributions for the months Medicare covers you, even with Part A alone. This affects both your contributions and employer contributions. You can still use an existing HSA balance for qualified medical expenses.

Premium-free Part A can start retroactively, up to six months before you apply for Medicare or Social Security benefits, but no earlier than your first month of Medicare eligibility. Contributions allocated to those retroactive coverage months can become excess contributions.

If you apply more than six months after becoming eligible at 65, plan to stop both employee and employer HSA contributions at least six months before applying. If you enroll sooner, confirm your first covered month and stop contributions for that month onward. A birthday on the first day of a month can move age-based Medicare eligibility to the previous month. Get the effective date from Social Security and coordinate the contribution cutoff and annual limit with payroll or your tax preparer.

Check prescription drug coverage separately

Part D is Medicare prescription drug coverage. You can generally delay it while you have creditable drug coverage, meaning coverage expected to pay, on average, at least as much as standard Medicare drug coverage. Having employer medical insurance does not by itself establish that the drug benefit meets this test.

Ask the plan for its current creditable coverage notice and keep it with your records. Check again when the plan changes. COBRA or retiree drug coverage can be creditable for Part D even though that medical coverage does not protect a Part B delay.

If your drug coverage is not creditable, address Part D enrollment before deciding to delay Medicare. A stand-alone Part D plan requires Part A or Part B. Starting either part also ends HSA contribution eligibility for the months it covers.

After your initial drug enrollment window, a gap of 63 consecutive days or more without Medicare drug coverage or other creditable coverage can trigger a continuing Part D penalty. When employer or union coverage ends, the opportunity to join a Medicare drug plan generally lasts two full months after the month coverage ends. These are separate rules: waiting until the enrollment window closes can still leave a drug coverage gap.

Arrange the new coverage before the old drug benefit ends. Use the Medicare plan finder to compare plans for your medicines and pharmacy, then confirm the effective date with the selected plan. Before enrolling, ask whether joining an outside Medicare drug plan would end any employer coverage for you or your dependents.

Use the right enrollment window and application

If you need Medicare at 65, use your Initial Enrollment Period, the first enrollment window around your birthday. It lasts seven months: the three months before your birthday month, that month, and the three months after. If employment or group coverage ends during that window, use the initial window rather than assuming you have the later job-based Special Enrollment Period described next. Ask Social Security for your exact dates, especially with a first-of-the-month birthday.

After that initial window, qualifying work-based coverage can allow enrollment while the covered employment continues. The later eight-month Part B Special Enrollment Period begins with the month after employment or group coverage ends, whichever ends first. COBRA, retiree coverage, or employer-paid continuation after the job ends does not restart or extend it.

Eight months is an enrollment deadline, not eight months of replacement medical insurance. Start the transition before the employer coverage ends. Part B enrollment through this work-based period does not require waiting for annual fall plan enrollment.

If you already have Part A

Use Social Security’s Part B enrollment application. For the work-based Special Enrollment Period, prepare the Application for Enrollment in Part B, CMS-40B, and Request for Employment Information, CMS-L564, available on the Medicare enrollment forms page.

You complete Section A of CMS-L564 and have the employer complete Section B to document employment and group coverage. Gather records covering the period since you first became eligible for Part B, including earlier employers if needed. In the application’s remarks, state the month and year you want Part B to begin.

If the employer cannot complete Section B, complete it as best you can without the employer’s signature and submit alternative evidence, such as pay stubs showing health insurance deductions or W-2s showing pretax medical contributions. Social Security must still verify your eligibility. You can also mail or fax the completed forms and evidence to your local Social Security office.

If you need both Part A and Part B

Start with Social Security’s Medicare application, which provides the route for enrolling in both parts. The Part B-only application is for someone who already has Part A. Have your employment and group coverage dates ready, explain that you delayed because of current work-based coverage, and confirm what evidence Social Security needs for your enrollment period.

If you or your spouse worked for a railroad, use the Railroad Retirement Board enrollment route to confirm who handles your application.

Confirm coverage dates before ending the employer plan

Ask the employer for the last day of medical coverage and the last day of creditable drug coverage; these dates may differ from your last workday. Begin Medicare enrollment about a month before employer coverage ends, allowing time to resolve missing evidence. Coordinate an earlier HSA cutoff if Part A will be retroactive.

Keep your application receipt, then confirm the approved Part A and Part B effective dates and any separate drug plan start date. Submitting an application does not establish that replacement coverage is active. Resolve any gap before cancelling existing insurance.

If a spouse or dependent will stay off Medicare, arrange that person’s coverage separately. The COBRA and Marketplace comparison after job loss can help with that family coverage decision. Those insurance options have their own enrollment rules and do not extend your Medicare Part B deadline.