65 and Still Working? When Should You Sign Up for Medicare?
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If you’re still working at 65, you have a decision to make: Do you stick with your employer’s health insurance (or your spouse’s employer’s coverage) or make the jump to Medicare? Moving to Medicare might lower your out-of-pocket costs, but you’ll need to evaluate your situation.
Medicare is complicated, and there are a lot of caveats and some surprise expenses to be avoided. So for working people 65 or older, here’s help with figuring out when to sign up for Medicare and how to avoid costly late-enrollment penalties and gaps in coverage.
A note for married couples: If you're covered by your spouse's employer insurance, this information also applies to you when you turn 65.
Is it a good idea to get Medicare if you're still working at 65?
If your employer coverage requires you to pay a big portion of the premium on your group health insurance, you may find Medicare cheaper and the coverage adequate. Compare your current coverage and out-of-pocket expenses — including premiums, deductibles, copays and coinsurance — with your costs and benefits under Medicare, which may also pay some expenses not covered by your group plan.
» MORE: When does Medicare start?
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Do you have to sign up for Medicare at 65 if you're still working?
The answer here depends on the size of your employer, whether you qualify for free Medicare Part A and whether you’re contributing to a health savings account (HSA).
If your employer has 20 or more employees
If your or your spouse's employer has 20 or more employees and a group health plan, you don't have to sign up for Medicare at 65. But if you get Medicare Part A for free, typically you should sign up. (After all, it’s free.) In some cases, Medicare Part A may cover what your employer plan doesn’t. If you have to buy Part A, you can delay until you stop working or lose employer health insurance.
You will probably want to delay enrolling in Medicare Part B unless the coverage is better and cheaper than what you’re receiving through employer insurance. Everyone pays a premium for Part B, so it’s never a free add-on. But the clock starts ticking once you stop working or lose your employer coverage (see below), so don't miss your window. And you’ll want to sign up for Medicare at least a month before your employer coverage ends.
You can also delay enrolling in Medicare Part D as long as you have creditable coverage from your employer (or another policy). But there are penalties if you go too long without drug coverage, so when you or your spouse stop working or lose coverage, you’ll want to sign up for Part D.
Creditable coverage means your coverage is at least as good as the drug benefits provided by Medicare Part D plans. Once you’re eligible for Medicare, the plan providing your prescription drug coverage should send you an annual notice letting you know whether your drug coverage is creditable. If it’s not, you’ll want to sign up for Medicare Part D (or a Medicare Advantage plan that includes prescription drug coverage) to avoid penalties.
If you have a high-deductible health plan with an HSA
If you're saving to a health savings account (HSA) and want to keep doing so, you must delay enrollment in Medicare Part A (and Part B), because Medicare enrollees can't contribute to an HSA. To avoid a tax penalty, you should plan to stop making HSA contributions at least six months before signing up for Medicare if you enroll after age 65.
If your employer has fewer than 20 employees
If your or your spouse's employer has fewer than 20 employees and health coverage isn't part of a multi-employer group plan, at age 65 you must enroll in Medicare Part A and Part B, which will act as your primary insurance. “Primary” means that Medicare pays first, then the employer insurance kicks in to pay whatever might be covered under that policy but wasn't covered by Part A.
If the employer participates in a multi-employer group plan (confirm this with your benefits advisor), that plan would be your primary insurance, paying before Medicare. In this case, you can wait to sign up for Medicare Part B until you or your spouse stops working or loses coverage. (Since Part A is typically free, there’s no need to delay signing up unless you want to keep saving to an HSA.)
You can wait to sign up for Medicare Part D as long as you have acceptable drug coverage through your employer or elsewhere. Going too long without drug coverage can lead to permanent penalties once you do sign up.
Can you have Medicare and employer coverage at the same time?
You can have Medicare alongside coverage from your employer or a spouse’s employer. In this situation, both coverages are considered “payers,” and there are rules about which payer covers your health costs first and which payer covers any costs that are left. This can get complicated, so it’s a good idea to call Medicare’s Benefits Coordination & Recovery Center at 855-798-2627 to make sure you understand how it all works.
That said, if you have a high-deductible health plan and want to contribute to an HSA, you can’t be signed up for Medicare Part A or Part B.
How much does Medicare cost if you're still working?
If you reach 65 and you’ve worked a total of approximately 10 years over your career, you’re entitled to premium-free Medicare Part A, which is your hospital insurance. Medicare Part B, which pays for doctor visits and many other outpatient services, requires a monthly premium of $174.70 per month in 2024 ($185 in 2025). Medicare Part D is prescription drug coverage, and the average total monthly premium is $46.50 in 2025.
Potential penalties
Delaying enrollment for Medicare can have permanent consequences if you make a mistake. Here’s why it’s important to get it right:
Medicare Part A
You might owe a penalty if: You don’t get Part A for free, you don’t enroll at age 65 and you don’t sign up within eight months of stopping work or losing employer coverage (whichever comes first).
Penalty amount: Your Part A premium could go up 10% for twice the number of years you could have had Part A but didn’t.
Medicare Part B
You might owe a penalty if: You don’t enroll in Part B at age 65 and you don’t sign up within eight months of stopping work or losing employer coverage.
Penalty amount: A 10% bump in your monthly premium for every 12-month period you could have had Part B but didn’t. This penalty is permanent.
Medicare Part D
You might owe a penalty if: You don’t enroll in Part D at age 65 and you go 63 or more days in a row without Part D or other creditable drug coverage.
Penalty amount: There is an amount added to your premium each month based on how long you went without coverage. This penalty is permanent.
Before delaying
Before delaying Medicare, consult with your or your spouse’s benefits administrator to be sure you understand how your group plan will cover you at age 65 and beyond.
Special situations: Previous employers, military and vets
If you have health insurance from a previous employer, such as your or your spouse’s COBRA or retiree health coverage, you need to enroll in Medicare Parts A and B when you turn 65.
If you have health benefits as a military service member or veteran, such as TRICARE or CHAMPVA, you should consult with those programs to determine when to enroll in Medicare.
It’s complicated, so get all the advice you need.
Medicare processes and rules are complex and full of exceptions; if you overlook something in the enrollment rules, you may pay a high price in terms of both penalties and gaps in coverage. Consult with Medicare and with your benefits administrator before you enroll or decide to delay enrollment.
