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If I’m still working at age 65, when do I sign up for Medicare?

En español | If you aren’t already receiving Social Security benefits at age 65, you won’t be signed up automatically. So you’ll have to make a decision.

Whether you need to enroll in Medicare if you continue to work and have health benefits through your job depends on the size of the employer. The same rules apply if your health insurance is through your spouse’s job.

Do I need to enroll at 65 if I work for a large company?

As long as you have health insurance from a company that employs 20 or more people where you or your spouse actively works, you can delay enrolling in Medicare until the employment ends or the coverage stops, whichever happens first. You’re entitled to a special enrollment period (SEP) to sign up for Medicare before or within eight months of losing that job-based coverage to avoid a late-enrollment penalty.

The law. Large employers with at least 20 employees must offer you and your spouse the same benefits they offer younger employees and their spouses. You — not the employer — can decide whether to:

  • Accept the employer health plan and delay Medicare enrollment
  • Decline employer coverage and rely wholly on Medicare
  • Have employer coverage and Medicare at the same time

Many people enroll in Medicare Part A at 65, even though they have employer coverage, because it’s free unless they or their spouse has paid fewer than 40 quarters of Medicare taxes. However, they may decide to wait if they want to continue contributing pretax dollars to a health savings account (HSA). More on that later.

Those who have access to employer-based health insurance often delay signing up for Part B while they’re still working. That way, they don’t have to pay premiums for both Medicare and the employer coverage.

Be aware. If you choose to enroll in both an employer group plan and Medicare Part B, the employer insurance is always primary when a large company provides it. That means it pays your medical bills first.

Medicare will pay only for services it covers that the company plan does not. So unless your employer insurance doesn’t cover much, you could be paying monthly Medicare premiums with little or no return.

Medigap also might be affected. If you sign up for Part B while you still have coverage from a large employer, you could be forfeiting your right to buy Medicare supplement insurance, better known as Medigap, with full federal protections after this employment ends.

Even if you have health problems, insurance companies must sell you a Medigap policy and charge you the same rates as someone without preexisting conditions if you buy the policy within six months of enrolling in Part B when you’re 65 or older. After those six months pass, Medigap insurers in most states can deny coverage or charge more because of preexisting conditions, except in special situations.

Having coverage from a large employer does not extend that six-month period.

Do I need to enroll at 65 if I work for a small company?

The laws that prohibit large companies from requiring Medicare-eligible employees to drop the employer plan and sign up for Medicare do not apply to companies with fewer than 20 people. In this situation, the employer decides.

You generally need to sign up for Medicare Parts A and B during your initial enrollment period, which begins three months before and ends the three months after the month you turn 65. If you don’t, you could end up with large coverage gaps.

If the employer does require you to enroll in Medicare, which is most common, Medicare automatically becomes your primary coverage at 65 and the employer plan provides secondary coverage. In other words, Medicare settles your medical bills first, and the group plan pays only for services it covers but Medicare doesn’t.

So if you fail to sign up for Medicare when required, you essentially will be left with no coverage.

Extremely important: Ask the employer whether you are required to sign up for Medicare when you turn 65 or are eligible to receive Medicare earlier because of a disability. If so, find out exactly how the employer plan will fit in with Medicare. If you’re not required to sign up for Medicare, ask the employer to provide the decision in writing.

Medigap when working for a small employer. The Medigap signup rules are different than they are for large companies. In this situation, signing up for Medicare Part B when you also have employer insurance will not jeopardize your chances of buying a Medigap policy after the employment ends.

When Medicare is primary coverage and the employer plan is secondary, you have the right to buy Medigap later with full federal protections. But you must do so within 63 days of the employer coverage ending.

What if I get health coverage from COBRA or another plan?

You still need to sign up for Medicare during your initial enrollment period. You can delay signing up for Medicare only if you have insurance through your own or your spouse’s current employer. 

If you or your spouse is not an active employee, you can’t delay Medicare enrollment without penalty after leaving the job, even if you continue coverage on your employer’s plan through COBRA. The federal Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) requires employers with 20 or more employees to let them continue health insurance coverage for up to 18 months, or up to 36 months for certain disabled individuals and family members, after they or their spouse leaves their job.

But Medicare becomes your primary coverage when you turn 65, and the COBRA coverage is secondary. This is another case where you could face big coverage gaps if you don’t sign up for Medicare at the proper time. 

Retiree health insurance benefits from a former employer function the same way, even if you’re working in another job. You or your spouse must be actively working for the employer that now provides your health insurance if you want to delay Medicare enrollment and qualify for a special enrollment period later.

Keep in mind 

A caveat on Part A. Many people sign up for Medicare Part A, which covers hospitalization, when they turn 65 even if they’re working for a large employer because they’ve worked long enough to qualify for free Part A. But if you have a high-deductible health insurance policy and you want to continue contributing to a health savings account (HSA), you may want to delay enrolling in Part A.

You can’t do both simultaneously. After you enroll in either Medicare Part A or B, you can’t put pretax money into an HSA, the reason the accounts are so attractive. So some people who are insured through large employers delay signing up for both parts of Medicare until after they or their spouse leaves the job that provides the health insurance. When that happens, you’ll have up to eight months to enroll in Medicare Part B or else you will end up with permanent late enrollment penalties.

If you enroll in Part A after 65, that coverage is retroactive for up to six months, so be sure to stop contributing to the HSA before the date your coverage will take effect. Your HSA annual contribution limit will be prorated based on the number of months you had an eligible high-deductible health insurance policy before your Medicare coverage became effective.

How to figure it out. If you are planning to retire in September, the ninth month, but want to make your Medicare retroactive six months, you would be able to make three months of contributions to your HSA. In 2022, that would equal a maximum of $1,162.50; [(the $3,650 annual maximum for single coverage + $1,000 for being 55 or older)/12 to make it monthly] x 3 for the first three months of the year that you won’t have Medicare.

Updated June 20, 2022



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