Quick answer: if you or your spouse are still working at 65 and covered by a group health plan from an employer with 20 or more employees, you can usually delay Part B without a penalty. The employer plan pays first and Medicare pays second. When the job or the coverage ends, whichever happens first, you have an 8-month Special Enrollment Period to sign up for Part B. If the employer has fewer than 20 employees, Medicare usually pays first, so you generally need Part A and Part B as soon as you are eligible.
More people keep working into their late 60s, and many have good health insurance through their job. That raises a practical question at 65: do you need Medicare now, later, or both at once?
The answer depends mostly on the size of the employer, whether the coverage comes from current employment, and whether you contribute to a health savings account. This guide walks through each of those points, the timing rules and the paperwork. For the wider picture of eligibility, costs and plan choices, see our Medicare guide.
Rules below come from Medicare.gov, the Social Security Administration (SSA) and the IRS, checked October 2026. Employer plans have their own rules, so always confirm with your benefits administrator. This is general information, not personalized insurance, tax or legal advice.
The Key Question: How Many Employees Does Your Employer Have?
Medicare coordinates with employer coverage under federal Medicare Secondary Payer rules. The size of the employer decides which plan pays first, and that decides whether you can safely skip Part B.
20 or more employees: the employer plan pays first
If you are 65 or older and covered by a group health plan based on your own or your spouse’s current employment, and the employer has 20 or more employees, the group plan is the primary payer. Medicare, if you have it, pays second. The SSA notes that employers with 20 or more employees are required by law to offer workers 65 and older, and their spouses who are 65 or older, the same group health benefits they offer younger employees.
In this situation, Medicare.gov’s working past 65 page says you can wait to sign up for Part B until you or your spouse stop working or lose the coverage, without a late enrollment penalty.
Fewer than 20 employees: Medicare usually pays first
With a smaller employer, Medicare is generally the primary payer. Medicare.gov warns that your job-based coverage might not pay for services if you do not have both Part A and Part B. Some small employers join multi-employer plans with different rules, so ask your benefits administrator in writing whether you need Medicare at 65.
Disability before 65
If you have Medicare because of a disability rather than age, the threshold is different. A group plan from current employment pays first only if the employer has 100 or more employees.
Is Your Coverage From Current Employment?
The Part B Special Enrollment Period only protects you if your coverage is a group health plan based on current work, yours or your spouse’s. Many people assume any insurance counts. It does not.
Coverage that counts
According to the SSA’s guidance on group health plans, qualifying coverage includes small or large employer plans for current employees, self-insured employer plans, union plans tied to current work, and some national health plans in other countries.
Coverage that does not count
The SSA lists several kinds of coverage that are not based on current employment:
- COBRA continuation coverage.
- Retiree health coverage.
- Coverage continued through severance pay.
- Plans that cover only self-employed people.
- Health savings accounts on their own.
- VA health care.
Individual Marketplace plans are not employer coverage either. If you are on one of these at 65 and skip Part B, you risk a lifetime penalty and a gap in coverage. Our article on when to sign up for Medicare covers the Initial Enrollment Period in detail.
Working spouses
A spouse’s current employment counts. If you are 66 and retired but covered by your 63-year-old spouse’s large-employer plan, you can usually delay Part B until that coverage or job ends. The same 20-employee rule applies to the spouse’s employer.
Part A: Take It, or Wait?
Most people get Part A without a premium because they or a spouse paid Medicare taxes for at least 10 years. Because it costs nothing, many workers sign up for Part A at 65 even while keeping employer coverage. Part A can then act as secondary coverage for hospital bills.
The exception: health savings accounts
If you contribute to a health savings account (HSA), enrolling in any part of Medicare matters. IRS Publication 969 says you cannot contribute to an HSA for any month you are enrolled in Medicare. You can still spend money already in the account on qualified expenses.
There is also a timing trap. When you sign up for premium-free Part A after you turn 65, the SSA generally makes Part A coverage retroactive for up to six months, though not earlier than the month you turned 65. Contributions made during those retroactive months can become excess contributions. A common approach is to stop HSA contributions, including any employer contributions, six months before you apply for Medicare. Talk with a tax professional about your situation.
Social Security benefits and Part A
If you start Social Security retirement benefits at or after 65, you are automatically enrolled in Part A. You cannot decline premium-free Part A while receiving Social Security benefits, so HSA contributors who want to keep contributing usually delay claiming Social Security too.
When to Sign Up for Part B While Working
You have two safe choices when you have qualifying large-employer coverage: enroll in Part B during your Initial Enrollment Period, or wait.
Reasons people delay Part B
- Premium savings. The standard Part B premium is $202.90 a month in 2026, according to CMS, and higher-income people pay more. If your employer plan pays first, Part B may add little value.
- Medigap timing. Your six-month Medigap Open Enrollment Period starts the month you are 65 or older and enrolled in Part B. Delaying Part B also delays that window, so it is still available when you retire.
Reasons people enroll anyway
- Your employer plan has a high deductible or narrow network, and Medicare as secondary would cover some of what it leaves.
- Your employer has fewer than 20 employees or requires Medicare.
- You are retiring soon and want to avoid any gap.
Before deciding, compare your employer plan’s deductible and out-of-pocket maximum with what Part B would add. Higher earners should also check the income-related surcharge explained in our guide to Medicare premiums and IRMAA.
The 8-Month Special Enrollment Period
When large-employer coverage ends, the clock starts. Medicare.gov and the SSA’s when to sign up page describe the Special Enrollment Period this way.
When you can sign up
- Any time while you, or your spouse, are working and covered by the group health plan.
- Within 8 months after the employment ends or the group coverage ends, whichever happens first.
Medicare.gov is specific about one point that trips up many retirees: the 8-month period starts when you stop working, even if you choose COBRA or other coverage that is not Medicare. Choosing COBRA does not pause the clock.
When coverage starts
If you sign up during the Special Enrollment Period, Part B usually starts the month after Social Security receives your completed forms. Medicare.gov suggests signing up about a month before your employer coverage ends to avoid a gap. You can choose a later start date in some cases.
If you miss it
Miss the 8-month window and you will generally have to wait for the General Enrollment Period (January 1 to March 31), with coverage starting the month after you sign up. You may also owe a Part B late enrollment penalty of 10% for each full 12-month period you could have had Part B but did not, which Medicare.gov says usually lasts for as long as you have Part B.
Drug Coverage: Part D and Creditable Coverage
Part D has its own penalty rules. You can delay Part D without a penalty only if your employer drug coverage is creditable, meaning it is expected to pay, on average, at least as much as standard Medicare drug coverage.
How to know
Employers and plans with drug coverage send a notice each year telling Medicare-eligible members whether their coverage is creditable. Keep these notices; you may need them to prove you had coverage.
The 63-day rule
Medicare.gov explains that you may pay a Part D late enrollment penalty if you go 63 days or more in a row without Part D or other creditable drug coverage after your Initial Enrollment Period. When your employer coverage ends, you get a Special Enrollment Period to join a Medicare drug plan or a Medicare Advantage plan with drug coverage. Plan that switch so there is no long gap.
Retiring: Your Step-by-Step Transition
A smooth move from employer coverage to Medicare takes a few months of planning.
Three months before your last day
- Confirm the exact date your employer coverage ends. Some plans end on your last day of work; others run through the end of that month.
- If you have an HSA, confirm that contributions have stopped at least six months before your planned Medicare start, as discussed above.
- Decide between Original Medicare with a Medigap policy and a Part D plan, or a Medicare Advantage plan. Our comparison of Medicare Advantage vs Medigap can help.
One to two months before
- Complete Form CMS-40B, the application for Part B, and Form CMS-L564, the Request for Employment Information. Your employer fills in Section B of the L564 to show you had group coverage based on current employment.
- Submit the forms to the SSA online, by fax or by mail, as directed on SSA.gov. If your employer cannot complete the L564, the SSA accepts other proof, such as pay stubs showing health premiums or tax forms showing group coverage.
- If you did not take Part A at 65, apply for it at the same time.
After Part B starts
- Apply for a Medigap policy within your six-month Medigap Open Enrollment Period, if you want one. Federal law also gives guaranteed issue rights in certain situations when employer coverage ends.
- Join a Part D plan or a Medicare Advantage plan within the Special Enrollment Period tied to losing employer coverage.
- If your income dropped because you stopped working, you can ask Social Security to recalculate any income-related premium using Form SSA-44, which lists work stoppage as a life-changing event.
Special Situations
A few situations come up often enough to cover separately.
Retiree coverage from a former employer
Retiree plans usually pay after Medicare. Many require you to have Part A and Part B and will reduce what they pay if you do not enroll. Check your plan’s rules before your employer coverage converts to retiree coverage.
COBRA after a layoff at 65 or older
COBRA can bridge a gap, but it does not protect you from the Part B penalty. If you are already eligible for Medicare, sign up for Part B within 8 months of the job ending, even if COBRA continues.
Self-employed workers
If you work for yourself and buy an individual plan, that plan is not group coverage based on current employment for Medicare purposes. Plan to enroll during your Initial Enrollment Period.
Federal employees and military retirees
Federal employee coverage (FEHB) for active workers counts as employer coverage. TRICARE For Life, the program for Medicare-eligible military retirees, generally requires you to have Part B. Check with your benefits office or TRICARE before deciding.
A Simple Decision Table
| Your situation at 65 | Part A | Part B |
|---|---|---|
| Large employer (20+), no HSA | Often enroll (premium-free) | Usually safe to delay |
| Large employer (20+), contributing to an HSA | Delay to keep contributing; stop contributions 6 months before enrolling | Usually safe to delay |
| Small employer (under 20) | Enroll | Usually enroll, unless the employer confirms in writing it pays first |
| COBRA or retiree coverage | Enroll | Enroll during your IEP or within 8 months of the job ending |
| Individual Marketplace plan | Enroll | Enroll during your IEP |
If any row does not fit your situation cleanly, call your benefits office and your State Health Insurance Assistance Program (SHIP) before your Initial Enrollment Period ends. SHIP counselors give free, unbiased advice and can be found through SHIPhelp.org or 1-800-MEDICARE.
Frequently Asked Questions
Do I have to sign up for Medicare at 65 if I am still working?
Not always. If you or your spouse have group coverage from current employment with an employer of 20 or more employees, Medicare.gov says you can delay Part B without a penalty. Many people still take premium-free Part A unless they contribute to an HSA.
Does COBRA count as employer coverage for Medicare?
No. The SSA does not treat COBRA as coverage based on current employment, and Medicare.gov says your 8-month Special Enrollment Period starts when you stop working, even if you choose COBRA.
Can I keep contributing to my HSA after 65?
Only while you are not enrolled in any part of Medicare. Because premium-free Part A can be backdated up to six months when you enroll after 65, many people stop contributions six months before applying.
What forms do I need to sign up for Part B later?
Form CMS-40B (Application for Enrollment in Part B) and Form CMS-L564 (Request for Employment Information), which your employer completes to confirm your group coverage.
What if my employer has fewer than 20 employees?
Medicare usually pays first. Medicare.gov warns that your job-based coverage might not pay for services if you do not have both Part A and Part B, so ask your employer before you skip either part.
Sources
- Medicare.gov, Working past 65, and When can I sign up for Medicare.
- Medicare.gov, Sign up for Medicare Part B package (CMS-40B and CMS-L564).
- Medicare.gov, Avoid late enrollment penalties.
- Social Security Administration, When to sign up for Medicare, and More Info: Group Health Plan.
- IRS Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans.
- CMS, 2026 Medicare Parts A and B premiums and deductibles fact sheet.
