Working Past 65: How Medicare Fits With Job Coverage
If you or your spouse keep working past 65, whether you need Part B now depends on your employer size. Here is how the rules work, how to avoid penalties, and what to do with an HSA.
If you keep working past 65 and have group health coverage through your own or your spouse's current job, you may be able to delay Part B without a penalty. The key is employer size. With 20 or more employees, the group plan usually pays first and Medicare second, so many people take premium-free Part A and wait on Part B. With fewer than 20 employees, Medicare usually pays first, and you generally need Part B as soon as you are eligible. When the job or the coverage ends, you have an 8-month Special Enrollment Period to sign up for Part B.
Who pays first
Always confirm with the employer's benefits administrator in writing. Some small employers belong to a multi-employer plan with different rules.
| Your situation | Who usually pays first | Do you need Part B now? |
|---|---|---|
| Employer has 20 or more employees | The group plan | Usually optional; many people delay it |
| Employer has fewer than 20 employees | Medicare | Usually yes, or the group plan may pay little |
| Retiree coverage, COBRA or individual coverage | Medicare | Yes: these do not count as coverage from current work |
| Disability and employer with 100 or more employees | The group plan | Usually optional |
Should you take Part A while still working?
Part A is premium-free for most people, so many take it at 65 even while working. It can pay secondary to your group plan on a hospital stay. The exception is a Health Savings Account: once any part of Medicare starts, you can no longer contribute. If you want to keep funding an HSA, delay both Part A and Part B, and do not start Social Security retirement benefits, which enroll you in Part A automatically.
When you later enroll in Part A after 65, it can be backdated up to six months (never earlier than the month you turned 65). Stop HSA contributions six months before you apply to avoid a tax penalty on contributions made after coverage began.
Drug coverage while you work
Your employer must tell you each year whether its drug coverage is "creditable", meaning at least as good as standard Part D. If it is, you can delay Part D without a penalty. Keep those notices: you may need to show them when you join a Part D plan later.
If the coverage is not creditable, consider joining Part D during your Initial Enrollment Period, because the penalty is 1 percent of the national base premium ($38.99 in 2026) for every full month you go without.
When you retire: the steps in order
- About two to three months before your coverage ends, ask your employer to complete form CMS-L564 (Request for Employment Information).
- Complete form CMS-40B (Application for Enrollment in Part B) and submit both to Social Security, online, by mail or in person. Ask for Part B to start the day after your group coverage ends.
- Use the 8-month Special Enrollment Period, which starts the month after your employment or coverage ends, whichever comes first. Do not count on COBRA to stretch it: COBRA does not extend the 8 months.
- Join a Medicare Advantage or Part D plan within 2 months after the group coverage ends.
- If you want a Medicare Supplement, apply as soon as Part B starts. Your six-month Medigap Open Enrollment Period begins the first month you have Part B and are 65 or older, so delaying Part B also delays, and protects, that window.
Common mistakes I see
- Assuming COBRA or retiree coverage lets you delay Part B. It does not, and the Part B penalty can follow you for life.
- Taking Social Security at 66 or 67 while still contributing to an HSA, which starts Part A and makes later contributions excess.
- Waiting until the last month of the 8-month window and leaving a gap with no coverage.
- Forgetting a spouse: if your spouse is covered on your plan and is under 65, they need their own plan when you retire. Our health insurance before Medicare guide covers Connect for Health Colorado options.
Income and IRMAA in your last working years
Medicare premiums are based on your tax return from two years earlier, so your highest-earning years can raise your Part B and Part D premiums right after you retire. In 2026, IRMAA starts above $109,000 of modified adjusted gross income for a single filer or $218,000 joint (CMS, 2026). If your income has dropped because you stopped working, file form SSA-44 with Social Security to ask for a new decision based on your current income.
The bottom line
Find out your employer's size and whether its drug coverage is creditable, decide about Part A with your HSA in mind, and when the job ends, file CMS-40B and CMS-L564 so Part B starts the day after group coverage stops. Treat the end of work as your real Medicare start date, including your one-time Medigap window. We help Brighton-area clients map this out a few months ahead, so nothing lapses.
Want to go through this with someone?
Lisa Asmussen at our Brighton office will go through your doctors, your prescriptions and your real numbers, and explain plainly what we found. Take the Stress Out of Medicare
Prefer to learn in a group? See our Medicare education sessions, in person in Brighton or online, and official Medicare forms and publications on our Resources page.
Sources
- 2026 Medicare Parts A and B premiums and deductibles, Centers for Medicare & Medicaid Services
- 2026 Medicare Part D bid information and base beneficiary premium, Centers for Medicare & Medicaid Services
- When can I sign up for Medicare?, Medicare.gov (CMS)
- Avoid late enrollment penalties, Medicare.gov (CMS)
Please note: We do not offer every plan available in your area. Currently we represent 10 organizations which offer 106 products in your area. Please contact Medicare.gov, 1-800-MEDICARE, or your local State Health Insurance Program (SHIP) to get information on all of your options. Headwaters Health and Wealth is not connected with or endorsed by the United States government or the federal Medicare program. Medicare has neither endorsed nor reviewed this information.