Still working at 65? What to do about Medicare

Turning 65 while still working used to be unusual. It isn't any more, and the rules haven't caught up with how normal it's become. This is the question I get asked most often, and the one where a wrong assumption costs the most.

Start with Part A

Most people take Part A at 65 regardless, because if you or your spouse worked and paid Medicare taxes for about ten years, it costs you nothing. It sits alongside your employer coverage and pays second.

Part B is the actual decision

Part B has a monthly premium, so paying for it while you already have good employer coverage may be paying twice for the same thing. That's why delaying exists.

But delaying is only safe if your employer coverage counts as creditable for this purpose — and that is where employer size comes in.

Why employer size matters

Medicare treats large and small employers differently, and it decides which coverage pays first.

At a larger employer, your group plan generally pays first and Medicare pays second — so delaying Part B is usually reasonable.

At a smaller employer, Medicare is generally expected to pay first. If you haven't enrolled, there may be nothing paying first, and your group plan can pay far less than you expect — or your insurer can reprocess claims months later on that basis.

The threshold isn't the same for every situation, which is exactly why "my friend delayed and it was fine" is not evidence about your case. Your HR or benefits administrator can tell you in one phone call how your plan coordinates with Medicare. That call is worth making.

Answer four questions about your own situation

Answer the questions and what applies to you will appear here.

When your job coverage ends

You then get a Special Enrollment Period to pick up Part B without a late penalty. It runs for a limited window after the coverage ends, and it's tied to the coverage ending — not to when you stopped working, which can be a different date.

Two things trip people here:

• COBRA does not count as employer coverage for this purpose. Taking COBRA and assuming it keeps your window open is a common and costly mistake.
• Retiree coverage generally doesn't count either. It's a benefit from a former employer, not active employment.

What to actually do

1. Ask your benefits administrator whether your plan pays primary or secondary once you're 65.
2. Ask whether your prescription coverage is creditable for Part D purposes. They'll know the term; it should be in writing somewhere.
3. If you have an HSA, decide about contributions before your birthday month.
4. Mark the date your employer coverage will end, whenever you expect that to be. Almost every decision after this hangs off it.

Then talk to someone before you do anything irreversible. This is a genuinely fact-specific question and it's worth twenty minutes to get right.