Just because you are 65 or older, still working, and covered by your employer’s health insurance, does not mean you should automatically not sign up for Medicare. In fact, if you enroll now, you might reduce your out-of-pocket costs.
There are millions of people across the nation who find themselves in this exact situation. According to the Bureau of Labor Statistics, in 2026, the share of Americans ages 65-74 who are still working will reach 30.2%.
Medicare can be a confusing labyrinth, with many rules and even surprise expenses. If you’re 65 or older and still working, we wrote this article to help you figure out if you should enroll in Medicare now to potentially avoid paying late-enrollment penalties and to avoid gaps in coverage.
Also, if you’re married and one spouse is covered by the other’s employer-provided health insurance, the information in this article applies to you as well when you turn 65.
Will Medicare save you money?
If your or your spouse’s employer has you paying a large chunk of your health insurance premiums, Medicare may be cheaper while still providing the coverage you want. Reconcile your current coverage benefits and out-pocket expenses – including premiums, co-pays, coinsurance, and deductibles – with your potential costs and benefits under Medicare, which may, in fact, pay some expenses that your employer plan does not.
Medicare Part A: If it’s free, use it!
If you are 65 or older, and have worked a total of roughly 10 years over your entire career, then you are eligible for premium-free Medicare Part A coverage. This benefit pays for in-patient hospital charges and more.
You should still consider signing up for the additional care under Part A, even if your employer provides high-quality coverage. This is because, occasionally, Medicare Part A can cover what your employer plan does not.
However, there are caveats and exceptions here, so read on.
If the employer has 20 or more employees: If your or your spouse’s employer has 20 or more employees as well as a group health plan, there is no need to register for Medicare at 65 if it doesn’t make sense financially. Though, remember, Part A is free to most people.
If the employer has fewer than 20 employees: If your or your spouse’s employer has fewer than 20 employees, and the health insurance plan is not part of a multiemployer group plan, then at age 65, you must enroll in Medicare Part A. Under this scenario, Part will serve as your primary insurance. As your primary insurance, Medicare pays for expenses first, and then the employer insurance will kick in to pay whatever is not covered by Part A.
If you have a Health Savings Account (HSA), and you want to keep contributing, then you must delay enrolling in Medicare altogether because Medicare beneficiaries cannot contribute to an HSA. To be safe and avoid a tax penalty, you should actually stop contributing to your HSA at least six months prior to enrolling in Medicare.
Potential penalties: If you choose not to enroll in Medicare Part A at the age of 65, and if you do not sign up within eight months of stopping work or losing employer coverage, you may have to pay a penalty. Either way, you should sign up for Medicare Part A before your employer coverage ends to avoid a gap in your health care coverage history.
Before delaying Part A: Before you make the choice to delay any Medicare coverage, you should consult with your or your spouse’s benefits administrator to ensure you understand how your group plan will work without Part A when you turn 65.
Medicare Part B: Delay to avoid premiums
If you are 65 or older and an employer healthcare plan still covers you or your spouse, you will likely want to put off enrolling in Medicare Part B. Part B pays for your doctor’s visits, among many other outpatient services. You’ll want to delay because everyone pays a premium for Medicare Part B, unlike Part A.
Similarly to Part A, everyone’s individual circumstances will alter your decision, but here are some pitfalls you should try to avoid with Part B:
If the employer has 20 or more employees: If your or your spouse’s employer has 20 or more employees and a group health insurance plan, you do not have to sign up for Medicare at age 65. However, once you stop working or if you lose your employer coverage, your Medicare sign-up window begins immediately. You do not want to miss out on this enrollment period.
If the employer has fewer than 20 employees: If your or your spouse’s employer has fewer than 20 employees, and the health coverage is not a part of a multiemployer group plan, then at age 65, you must enroll in Medicare Part B. At this point, Medicare Part B will become your primary insurance.
If you have an HSA and want to Continue contributing: If you have an HSA and want to keep making contributions, you should not sign up for Medicare Part B. Further, you should stop contributing to your HSA at least six months before you enroll in Part B. Also, you should enroll in Medicare at least a month before you stop working or lose your employer coverage.
Potential penalties: You must sign up for Medicare Part B within eight months of ending work or losing employer coverage. If you do not do this, your Medicare premiums may include a penalty. This penalty will last the rest of your life. Also, if you do not sign up at the right time, you may have to delay your Medicare enrollment, which could lead to gaps in your healthcare coverage.
Before delaying Part B: If you do choose to delay your Medicare Part B enrollment, you should be sure to discuss this decision with your or your spouse’s benefits administrator.
Special situations: Previous employers, military, veterans
If you are still covered by a previous employers healthcare plan – such as your or your spouse’s COBRA or retiree plan – you will still need to enroll in Medicare Parts A and B when you turn 65.
If your health plan is a result of military service, such as TRICARE or CHAMPVA, you will need to consult with these programs to find the best time for you to enroll in Medicare.
Medicare is a maze. There are many rules and exceptions to those rules, and if you fall afoul of these rules, you could pay the price either literally or in the form of gaps in your medical coverage. You should always consult with a Medicare official and a benefits administrator for your employer coverage before making the decision to delay or enroll in Medicare.