When to Sign Up for Medicare If You’re Still Working at 65

If you’re 65 or older, still working and are covered by employer health insurance — yours or a spouse's — it can make sense to sign up for Medicare now. Enrollment might reduce 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 where one spouse is covered by the other’s employer insurance: The information provided here 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 large portion of the premium on your group health insurance, you may find Medicare cheaper and the coverage adequate. So 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.

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 $53.95 in 2024 ($46.50 in 2025).

» MORE: When does Medicare start?

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 have to pay a premium for 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, 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. Unlike Medicare Part A, 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 you stop work or lose employer coverage.

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. 

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. In fact, to avoid a tax penalty, you should plan to stop making HSA contributions at least six months before signing up for Medicare. 

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 is part of a multi-employer group plan (you’ll have to ask your benefits advisor whether this is the case), that group health plan would be your primary insurance, meaning it would pay first. 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 depending on your circumstances, 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.

Potential penalties

Medicare Part A

There are only penalties associated with Medicare Part A if you have to pay premiums. In that case, if you don’t enroll in Medicare Part A at age 65 and neglect to sign up within eight months of stopping work or losing employer coverage (whichever comes first), you may have to pay a penalty. For Part A, your monthly premium could go up 10% for twice the number of years you could have had Part A (but didn’t). In any case, you should sign up for Part A before your employer coverage ends to avoid a gap in your health coverage.

Medicare Part B

You must sign up for Medicare Part B within eight months of stopping work or losing employer coverage. Failing to do this will result in a permanent penalty — a 10% bump in your monthly premium for every 12-month period you could have had Part B but didn’t. In addition, you may have to wait to enroll in Medicare, resulting in a risky gap in health care coverage.

Medicare Part D

Once you’ve passed your initial enrollment period — which typically includes your 65th birthday month, plus the three months before and after it — you may pay a permanent late enrollment fee for Medicare Part D if you go 63 or more days in a row without Part D or other creditable drug coverage. This will be an amount added to your premium each month based on how long you went without coverage.

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 rife with 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 the benefits administrator for your employer coverage — before you enroll or decide to delay enrollment.