Medicare and Employer Insurance: A Guide to Working Past 65

If you or your spouse are still working when you turn 65, Medicare and employer insurance can work together, and you may not need to sign up for everything at once. With health coverage from a current job, you may be able to delay Part B and sign up later without a late penalty. The right timing depends on your employer’s size, whether you have a Health Savings Account (HSA), and when your job-based coverage ends.

How Medicare and employer insurance work together

When you have both Medicare and coverage from a current job, one pays your bills first and the other pays second. Generally:

• Employer with 20 or more employees: the job’s plan pays first, and Medicare pays second.
• Employer with fewer than 20 employees: Medicare pays first, and the job’s plan pays second.

These are general rules. Confirm with your employer’s benefits office how its plan works with Medicare.

If Medicare should pay first and you don’t have Part B, your job’s plan may not pay for much of the care Part B would have covered. That’s why employer size matters so much to your decision.

Part A and Part B are separate decisions

Part A (hospital insurance)

Most people don’t pay a monthly premium for Part A, because they or a spouse paid Medicare taxes long enough while working. That’s why some people sign up for Part A at 65 even while they keep their job coverage. If you contribute to an HSA, read the HSA section below before you do.

Part B (medical insurance)

Part B has a monthly premium. For 2026, CMS set the standard Part B premium at $202.90 a month. If you have coverage from a current job, yours or your spouse’s, you can usually delay Part B. You can then sign up while you still have that coverage, or during the 8 months after it ends.

If you go without Part B when you should have had it, the penalty can be lasting. Under Medicare’s rules, it’s 10% of the standard premium for each full 12-month period you could have had Part B but didn’t, usually for as long as you have Part B.

Already getting Social Security benefits? You’ll be enrolled in Part A and Part B automatically when you turn 65. Our Turning 65 checklist explains how to turn down Part B if you have job coverage.

Medicare HSA rules: time your last contribution

You can’t contribute to an HSA once you have Medicare. Timing matters because of how Part A starts:

• When you sign up after 65, Part A coverage can be retroactive up to 6 months.
• Contributions made during those months may lead to a tax penalty.
• To avoid that, stop HSA contributions, yours and your employer’s, about 6 months before you sign up for Medicare or apply for Social Security benefits.

If you already get Social Security benefits, Part A generally starts automatically, so plan your HSA around that date. For questions about the money already in your HSA, talk with a tax professional.

The COBRA trap

COBRA lets you keep your employer’s plan for a while after you leave the job. But for Medicare, COBRA isn’t coverage from current employment. Neither is retiree coverage.

Type of coverage	Counts as coverage from current work?	What it means for Part B
Your current job’s group health plan	Yes	You can usually delay Part B and use the 8-month window later
Your spouse’s current job’s group health plan	Yes	Same as above
COBRA	No	The 8-month window starts when the job or job coverage ends, even if you take COBRA
Retiree coverage	No	Ask the plan whether it expects you to have Part A and Part B

Here’s the trap. Your 8-month window to sign up for Part B starts the month after your job or your job-based coverage ends, whichever comes first. If you wait for COBRA to run out before you sign up, the window may already be closed. You could then face the Part B late penalty and a wait for coverage.

Once your job ends, COBRA may pay only a small part of your medical costs if you don’t have Part B. Ask the COBRA plan how it works with Medicare before you decide.

Signing up later: the 8-month SEP and Form CMS-L564

When you’re ready to add Part B, you’ll use the Special Enrollment Period for people with job-based coverage. To show you had that coverage:

1. Get Form CMS-L564 to your employer. It’s called the Request for Employment Information. You fill in the first section, and your employer completes the rest to confirm your group health coverage and employment dates.
2. Apply for Part B through Social Security. You can start at ssa.gov/medicare/sign-up. The Part B application is Form CMS-40B, and Medicare.gov lists both forms.
3. Ask when your coverage will start. Try to time it so there’s no gap between your job coverage and Part B.

Our article on Medicare Special Enrollment Periods covers other situations that open a window.

Drug coverage: keep your creditable coverage letter

Your employer’s plan should tell you each year whether its drug coverage is “creditable,” meaning it’s expected to pay at least as much as Medicare’s standard drug coverage. Keep that notice.

If your job-based drug coverage is creditable, you won’t owe a Part D late penalty for those months. When it ends, you generally have 63 days to join a Medicare drug plan without a penalty. Under Medicare’s rules, the Part D penalty is 1% of the national base beneficiary premium for each full month you went without creditable coverage, for as long as you have Part D.

Don’t forget Medigap timing

Your 6-month Medigap open enrollment period starts the month you’re 65 and enrolled in Part B. If you delay Part B, this window waits too. Our article on Medicare Advantage vs Medigap explains why that window matters.

For counseling at no charge, call HICAP, California’s Health Insurance Counseling & Advocacy Program (1-800-434-0222), or Medicare at 1-800-MEDICARE (TTY 1-877-486-2048).

Frequently asked questions

Do I need Medicare if I’m still working?

Not always right away. If you have coverage from a current job, yours or your spouse’s, you may be able to delay Part B without a penalty. Employer size matters: with 20 or more employees, the job’s plan generally pays first, and with fewer than 20, Medicare generally does. Ask your benefits office how Medicare and employer insurance would work together for you before you decide.

Can I keep contributing to my HSA after I turn 65?

Turning 65 by itself doesn’t end HSA contributions, but having Medicare does. Because Part A can be retroactive up to 6 months when you sign up after 65, plan to stop contributions about 6 months before you sign up. A tax professional can help with the details.

How do COBRA and Medicare work together?

COBRA doesn’t count as coverage from current employment, so it doesn’t extend your 8-month window to sign up for Part B. Sign up within 8 months after your job or job coverage ends, even if you’re on COBRA. Ask the COBRA plan how it coordinates with Medicare.

What is Form CMS-L564?

It’s the Request for Employment Information. After you fill in your own section, your employer completes it to confirm you had group health coverage from current employment. Social Security uses it when you sign up for Part B during the Special Enrollment Period.

Talk with a licensed Boomers agent

A licensed Boomers agent can go over the Medicare plans we represent in your area and check them against your doctors and prescriptions.

Find a licensed agent near you · See upcoming Medicare events

Or call 1-800-815-1943 (TTY 711), Monday – Friday, 9 AM – 5 PM Pacific.

Sources

• Working past 65 (Medicare.gov)
• Who pays first (Medicare.gov)
• Avoid late enrollment penalties (Medicare.gov)
• Enrollment forms, including CMS-L564 and CMS-40B (Medicare.gov)
• CMS-L564 Request for Employment Information (CMS.gov)
• 2026 Medicare Parts A & B premiums and deductibles (CMS.gov)
• Sign up for Medicare (SSA.gov)