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Medicare for a New Generation

If you work past 65, here's what you need to know

Woman drinks coffee in an office, People working longer Medicare affects

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If you have health coverage from your current employer, you can delay Medicare enrollment without penalty.

En español | Medicare has been around for more than 50 years and its enduring popularity has transformed health security for older and disabled Americans. Medicare has protected many millions from poor health, premature death and medical bankruptcy, as was the hope when President Lyndon Johnson signed the program into law in 1965.

But Medicare choices have become more complicated, and so have people's lives. Twenty or 30 years ago it was considered the norm for people to retire, take Social Security and enroll in Medicare all at the same time — at age 65. Today, a new generation is upending those assumptions. By choice or necessity, almost one-third of boomers ages 65 through 69 are in the workforce, according to the Bureau of Labor Statistics. And a majority of 50-plus workers say they plan to work past 65, an AARP study has found.

The trend reflects increasing longevity and good health. Yet it also creates an issue that baffles many older workers: what to do about Medicare? Medicare enrollment is rife with pitfalls that can increase people's costs forever.

Here are answers to the questions that AARP receives most frequently from boomers who intend to go on drawing paychecks after blowing out those 65 candles.

Can I delay Medicare beyond 65 if I have insurance from an employer?

For as long as you're covered under a group health plan provided by an employer for which you (or your spouse) actively work — and that employer has 20 or more employees — you can delay Medicare enrollment until the job ends. Throughout that period, and for up to eight months afterward, you're entitled to enroll in Medicare without risking late penalties.

By law, your employer must offer you and your spouse exactly the same benefits it offers to younger employees. The employer can neither insist that you enroll in Medicare nor offer you any benefits — such as paying Medicare premiums — that could be seen as an inducement for you to drop the employer plan.

What if my insurance comes from a small employer?

The law doesn't apply to employers with fewer than 20 employees. The employer can require you to enroll in Medicare and, if it does, your work health plan becomes secondary to Medicare — meaning that Medicare settles your bills first — and won't pay for any services that Medicare covers. So if you don't join Medicare at 65, you'll essentially be left with no coverage. Always ask a small employer's plan how it fits in with Medicare — and if told you don't need Medicare, get it in writing.

What if I have retiree health benefits or COBRA?

You can delay Medicare enrollment without penalty only if you have health coverage from current employment. By definition, retiree benefits and COBRA coverage don't count. If you're in this situation and don't have coverage from current employment, sign up for Medicare at age 65.

What if my health benefits come from a former employer, but I currently work for another?

Because your health insurance doesn't come from an employer you or your spouse work for, you must sign up for Medicare at 65 to avoid late penalties.

What happens if I don't enroll at the right time?

You'll be able to sign up only during a general enrollment period that runs from Jan. 1 to March 31 each year, with coverage not beginning until July 1. And you'll likely get hit with late penalties that are added to your monthly premiums for all future years.

Does when I retire make a difference?

Yes. If you retire during your initial enrollment period (IEP) for Medicare—a seven-month time frame that ends three months after the month in which you turn 65—you aren't eligible for a special enrollment period until your IEP ends. So if you don't sign up during your IEP, you risk both delayed coverage and late penalties.

Can I have both Medicare and employer insurance after 65?

Yes, that's entirely your choice. But unless your employer plan provides very poor coverage, there are disadvantages. Your employer plan is automatically your primary plan when the employer has 20 or more workers. So if the employer plan pays all your medical bills, you'd likely be paying monthly premiums for Medicare Part B (which cover doctors' services and outpatient care) for little or no return.

What if my employer health plan includes a health savings account?

Under IRS rules, you cannot contribute to an HSA during any month that you're enrolled in any part of Medicare. You can draw on funds remaining in the account, but you can't add to them. You can avoid the problem by delaying Medicare enrollment until you retire. But be aware that if you apply for any Social Security benefits while still working, you'll be automatically enrolled in Part A (hospital insurance), you won't be able to opt out and the problem with your HSA will take effect.

Where can I go for help?

Call Social Security (which handles Medicare enrollment) at 800-772-1213800-772-1213 FREE800-772-1213800-772-1213 FREE. Or call your state health insurance assistance program, which offers free personal counseling on all Medicare issues. For contact information, go to and select your state.

Patricia Barry is the author of Medicare for Dummies (Wiley/AARP).

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