Still Working at 65? What to Do About Medicare and Your Employer Plan

Turning 65 while you're still working is one of the most confusing moments in Medicare — and one of the easiest places to accidentally trigger a lifetime penalty. The rules aren't hard, but they hinge on details HR usually doesn't spell out.

Here's the plain-English version of what to do when your 65th birthday shows up and you're still on an employer plan.

The one question that decides everything

Before anything else, find out how many employees your company has. That single number changes which insurance pays first — and whether delaying Part B is safe or expensive.

• 20+ employees: your employer plan pays first, Medicare pays second. Delaying Part B is usually fine.
• Fewer than 20 employees: Medicare pays first, your employer plan pays second. If you skip Part B, you can be left holding the majority of every bill.

Large employer (20+): delaying Part B is usually safe

If your group plan is genuinely creditable — and at a 20+ employer it almost always is — you can delay Part B without penalty and pick it up later through an 8-month Special Enrollment Period (SEP) when you retire or lose coverage.

Most people in this bucket still enroll in Part A at 65 because it's premium-free — with one important exception below.

Small employer (under 20): enroll in Part B at 65

This is the trap. At a small employer, Medicare is expected to be your primary coverage the day you turn 65. If you don't enroll in Part B, your group plan can legally pay as if Medicare had already paid its share — leaving you responsible for the rest.

If you're not sure where your employer falls, ask HR for it in writing before your birthday month.

The HSA rule that surprises everyone

The moment you enroll in any part of Medicare, including premium-free Part A, you can no longer contribute to a Health Savings Account. Worse, Part A enrollment is backdated up to 6 months (but never before your 65th birthday).

If you're still contributing to an HSA, stop contributions at least 6 months before you plan to enroll in Medicare or file for Social Security — filing for Social Security automatically enrolls you in Part A.

The COBRA trap

COBRA is not creditable coverage for Part B. If you leave your job at 66 and go on COBRA for 18 months thinking you'll deal with Medicare later, you'll owe a lifetime late penalty and be locked out until the next General Enrollment Period.

The 8-month SEP clock starts the day active employment ends — not the day COBRA ends.

Ask HR for two things — in writing

• Employer size confirmation — so you know whether Medicare is primary or secondary.
• The Part D "creditable coverage" notice — a one-page letter confirming your employer drug coverage is at least as good as Medicare's. Keep it. Without it, you can owe a Part D late penalty when you eventually enroll.

When you actually retire

You'll get an 8-month Special Enrollment Period to sign up for Part B (and Part D) without penalty. Don't wait until month 8 — Medigap's best window is the 6 months after Part B starts, and coordinating the start dates matters.

Educational only — not legal or tax advice. Employer size rules, HSA rules, and enrollment windows can change; confirm with your HR/benefits team, Social Security, or a licensed agent before acting.