Working past 65: do you have to take Medicare?
Not always. If you or your spouse have coverage from an employer with 20 or more employees, you can usually delay Medicare penalty-free and keep the work plan. Under 20 employees, Medicare needs to come first. Getting this wrong is expensive in both directions.
You may delay
Your work plan stays primary and you can skip Part B penalty-free while employed. Many people still take Part A since it is free, unless they contribute to an HSA. Get the delay documented by HR.
Medicare comes first
Medicare becomes your primary insurance at 65 whether you enroll or not, and small-group plans can refuse to pay what Medicare would have covered. Skipping Part B here can leave you close to uninsured.
Stop before enrolling
HSA contributions after Medicare Part A begins create tax penalties, and Part A can backdate up to six months when you sign up late. Plan the stop date with your HR or accountant before touching Medicare.
When you finally do retire
Leaving employer coverage opens an 8-month Special Enrollment Period for Part B, but only about two months for drug coverage. The order of operations matters, and doing it backwards is the classic mistake.
One more trap: COBRA does not count as employer coverage for delaying Part B. The penalty clock runs right through it. If retirement is on the horizon, a 15-minute call before your last day prevents every one of these problems.
Related questions
Does COBRA protect me from penalties? +
No. COBRA is not considered current employer coverage, so the Part B penalty clock keeps running while you are on it. Enroll in Part B within 8 months of stopping work, not 8 months of COBRA ending.
What if my coverage is through my spouse? +
Same rules, keyed to the spouse’s employer: 20 or more employees and you can usually delay penalty-free while that coverage lasts.
Do I need to do anything at 65 if I am delaying? +
Keep proof of creditable coverage from HR each year, decide whether free Part A makes sense given any HSA, and put your retirement date on a Medicare calendar the moment you know it.
Retiring soon? Map your exit before your last day of work.
Three quick questions, two minutes. A licensed broker calls you back within 15 minutes during business hours.