Working Past 65: Should You Delay Medicare?

🟦 Introduction: Still Working at 65? You’re Not Alone

If you’re still working at 65, don’t worry—you’re not behind.

In fact, you’re in great company.

Millions of Americans are staying in the workforce longer, whether for the paycheck, the purpose, or just to stay active.

👵🏽👴🏾 Maybe you like what you do.

Maybe you’re helping support your family.

Or maybe you’re just not ready to retire—and that’s perfectly okay.

But now you’ve got questions:
Do I need to sign up for Medicare?

What happens to my work insurance?

Will I be penalized if I wait?

✅ Don’t stress—we’ve got the answers.

This guide will walk you through everything you need about Medicare while working past 65.

Plain and simple.

🟦 Should You Delay Medicare? The Big Picture

🟢 Short answer: Yes, you can delay Medicare if you still have health insurance through a job with 20 or more employees.

And in many cases, it’s the smart move!

But it depends on your situation.

Let’s break it down:

✅ You Can Delay If:

• You (or your spouse) are still working
• The job provides health insurance
• The employer has 20 or more employees

In this case, you won’t face any late penalties for waiting to enroll in Medicare Part B.

Many folks delay Part B so they don’t pay for work insurance and Medicare simultaneously.

❌ You Shouldn’t Delay If:

• Your employer has fewer than 20 employees
• You don’t have health insurance through work
• Your work plan is expensive or limited

In these cases, it’s usually better to enroll in Medicare right away to avoid gaps in coverage or costly penalties down the line.

🤔 What About Part A?

Part A (hospital insurance) is usually free if you’ve worked 10+ years.

Many people sign up for Part A at 65—even if they delay Part B—because there’s no monthly premium.

BUT… if you’re still contributing to a Health Savings Account (HSA), even free Part A can cause problems.

More on that later.

TIP: Before making decisions, talk with your HR department or a Medicare advisor.

Every situation is a little different.

🟦 Understanding Medicare Basics: What Happens at Age 65?

Turning 65 is a significant milestone—and for most people, it’s also Medicare time.

Even if you’re still working, it helps to understand the basics.

Here’s a quick refresher on the parts of Medicare:

📦 Medicare in a Nutshell:

• Part A – Hospital insurance (usually free)
• Part B – Medical insurance (monthly premium)
• Part C – Medicare Advantage (private plans that combine A & B, and often D)
• Part D – Prescription drug coverage (through private companies)

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👩‍⚕️ What If You’re Not Working at 65?

If you’re not working and don’t have other coverage, you’ll want to:

• Sign up for Part A and Part B during your Initial Enrollment Period (starts 3 months before you turn 65)
• Choose Part D or a Part C plan that includes drug coverage

Missing your window could mean you’ll pay penalties for life.

Yep—for life.

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⚠️ Why You Shouldn’t Miss Part B or D

If you delay Part B or Part D without good reason (like employer insurance), you’ll face late penalties:

• Part B Penalty: Goes up 10% for each 12-month delay
• Part D Penalty: Adds 1% per month without coverage

And these don’t go away—they stick around as long as you have Medicare.

💡 Think of Medicare like a train: If you’re not working, you need to hop on when it arrives at 65—or you’ll be paying extra to catch up.

🟦 How Employer Coverage Affects Medicare Enrollment

Still working at 65?

Your job’s health insurance plays a significant role in your Medicare choices, especially the size of your employer.

Here’s what you need to know 👇

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🏢 Group Size Matters

• 20 or more employees?
  Medicare lets your employer plan pay first, and you can safely delay Part B without penalties.
• Fewer than 20 employees?
  Medicare becomes the primary payer. If you skip Part B, your employer plan might not cover you fully—or at all.

This is a big deal.

Let’s look at some real-life examples:

📍Texas: Many seniors working for large companies (like oil & gas or tech) safely delay Part B because their employer plans offer solid coverage.

📍North Carolina: Hospital staff often keep excellent group plans that allow them to wait on Medicare without worry.

📍Michigan: Retired auto workers may need to transition to Medicare even if they still receive union-sponsored retiree benefits.

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🔁 Coordination of Benefits (Who Pays First?)

If you’re eligible for both Medicare and employer insurance, the two plans must work together.

This is called coordination of benefits.

• In large groups (20+), your job insurance pays first, then Medicare (if enrolled) pays second.
• In small groups (under 20), Medicare pays first, and your work plan picks up what’s left—if it covers anything at all.

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🛑 When It’s Safe to Delay Part B (And When It’s Risky)

✅ Safe to delay:

• You have group coverage from a job with 20+ employees.
• The coverage is creditable (as good as Medicare)
• You’re not contributing to an HSA (if thinking about Part A too)

❌ Risky to delay:

• You work for a small employer (under 20)
• You assume your plan will cover everything without checking
• You forget to enroll in Part B when your job coverage ends

📞 Tip: Always ask your employer’s HR or benefits manager:
“Is our group plan considered creditable coverage for Medicare?”
This one question can save you thousands.

🟦 Should You Take Part A While Still Working?

Most people get Medicare Part A for free, so it might seem like a no-brainer to sign up at age 65.

But wait—if you’re using a Health Savings Account (HSA), this could be a costly mistake.

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🩺 What Is Part A Again?

Part A helps cover hospital stays, skilled nursing care, and home health services.

It’s free for most people who’ve worked 10 years or more, so many seniors sign up for it as soon as they’re eligible.

But there’s a catch…

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🚫 Part A Cancels Out Your HSA Eligibility

If you enroll in any part of Medicare, even just Part A:

• You can no longer contribute to your HSA
• Your employer must stop putting money in, too

This surprises a lot of people!

🧾 Example:
John in North Carolina turned 65 but kept working at the hospital and contributing to his HSA.

When he signed up for free Part A without realizing the rule, he had to stop all contributions immediately—and even faced a tax penalty for going over.

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📢 Callout Box

✅ If you want to keep contributing to an HSA, don’t sign up for any part of Medicare — not even Part A.

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When should you take Part A?

• If you’re not using an HSA, go ahead. It’s free and helps cover hospital costs.
• If you are using an HSA, hold off until you stop working or stop contributing.

🟦 What Happens If You Delay Medicare Without Employer Insurance?

⚠️ If you’re 65 or older and don’t have active job-based insurance, delaying Medicare can get you into trouble—even if you think you’re covered.

Many seniors make the mistake of relying on:

• COBRA
• Retiree health plans
• Marketplace (ACA) plans
• Spouse’s insurance from a small employer

But here’s the thing — Medicare doesn’t count those as “creditable” coverage.

That means if you delay Part B or Part D, you could get hit with permanent penalties and delays in coverage.

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🛑 COBRA: Not Medicare-Safe

COBRA might seem like a good safety net.

It lets you stay on your employer’s insurance for up to 18 months after leaving a job.

But Medicare sees it differently.

📢 Pull Quote:
🗣 “COBRA is not Medicare-safe — it won’t protect you from the Part B late enrollment penalty.”

So if you wait to enroll in Part B while using COBRA, you’ll likely:

• Owe a late enrollment penalty
• Have to wait for the next General Enrollment Period
• Go months without any coverage at all

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📍 Real-Life Examples

👵 Helen in Georgia: After retiring from a small manufacturing company, Helen kept her retiree health plan and delayed Medicare.

A year later, she needed surgery—but Medicare said she’d have to wait until next January to enroll.

She faced thousands in out-of-pocket bills.

👴 Frank in Arizona: Took COBRA thinking he’d save money.

When he tried to sign up for Part B, he learned he was 10 months too late—and would pay a 10% penalty for life.

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✅ Bottom Line:

If you don’t have active employer coverage (from a job with 20+ employees), don’t delay Medicare.

💡 When in doubt, get a free Medicare review before deciding.

One quick chat can save you a lifetime of penalties.

🟦 Avoiding Penalties: How and When to Enroll Later

If you’re working past 65 and planning to delay Medicare, good news — there’s a way to enroll later without paying penalties.

It’s called the Special Enrollment Period (SEP).

Let’s walk through how it works 👇

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📆 What Is the Special Enrollment Period?

The Special Enrollment Period lets you sign up for Medicare Part B (and Part D) after age 65 without a penalty—as long as you had creditable coverage from an employer with 20+ employees.

🧠 Think of it as your safety window once you retire or lose job-based insurance.

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📑 How Do You Prove Creditable Coverage?

Medicare doesn’t take your word for it.

You’ll need to show:

• A completed Employer Verification Form (CMS-L564)
• Proof of your job-based coverage (like pay stubs or benefits letters)

✅ TIP: Ask your employer to fill out the form before you leave your job.

That way, there’s no delay.

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🕒 Don’t Wait Too Long!

The SEP lasts for 8 months after your job-based insurance ends.

But here’s the trick:
Part D (drug coverage) only gives you 2 months to enroll penalty-free!

⏳ So don’t wait. Enroll in Medicare as soon as you leave your job or lose coverage.

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📊 Visual Suggestion: Enrollment Periods at a Glance

📅 Enrollment Period	When It Happens	Who It’s For	Penalty-Free?
Initial Enrollment Period	3 months before to 3 months after you turn 65	Everyone turning 65	✅ Yes
Special Enrollment Period	Up to 8 months after job-based insurance ends	People working past 65 with coverage	✅ Yes
General Enrollment Period	Jan 1 – Mar 31 each year	Those who missed their window	❌ No – Penalty applies

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⏰ Timing matters.

Get help early so you don’t fall into the penalty trap.

🟦 Can You Delay Medicare If You’re Self-Employed?

If you run your own business, work as a freelancer, or are a contractor, you may wonder: “Do I still need to sign up for Medicare at 65?”

The answer depends on what kind of health insurance you have.

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🧾 What Counts as Creditable Coverage?

You must have creditable coverage to delay Medicare without penalties—meaning your insurance is as good as Medicare.

But here’s the catch:

• Most self-employed plans, ACA marketplace plans, or private coverage DO NOT count as creditable for Medicare Part B.
• Even if the coverage is decent, Medicare may still charge you a penalty if you delay too long.

📍Indiana: A small business owner kept his family plan after 65, thinking it would cover him.

Medicare later charged him a permanent late fee when he signed up a year later.

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🩺 High-Deductible Plans and HSAs

Many self-employed people use high-deductible health plans (HDHPs) to keep premiums low and contribute to an HSA (Health Savings Account).

Here’s what you need to know:

• Once you sign up for Medicare Part A, you can’t contribute to an HSA anymore.
• You can still spend HSA funds tax-free on qualified medical costs (including Medicare premiums)—but no more adding to it.

📍South Carolina: A local contractor contributed to his HSA when he turned 65.

After enrolling in Part A, he had to stop and pay taxes on extra contributions made afterward.

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💬 What About Gig Workers or 1099 Contractors?

Many seniors doing gig work (rideshare, delivery, part-time consulting) think their income status affects Medicare rules.

But it doesn’t.

📍Pennsylvania: A retired teacher driving for a rideshare company tried to delay Medicare.

Since she had no employer-sponsored coverage, Medicare penalties kicked in.

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✅ Bottom Line:

If you’re self-employed:

• Don’t assume your private health plan protects you from Medicare penalties.
• Talk to a Medicare advisor before you hit 65.
• If you use an HSA, plan carefully—don’t enroll in Medicare until you’re ready to stop contributing.

💡 One quick review could save you years of penalties.

🟦 How HSA Rules Change Once You Get Medicare

This next part is really important if you’re using a Health Savings Account (HSA) and turning 65.

Once you sign up for any part of Medicare—even the free Part A—you can no longer contribute to your HSA.

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⏮️ The 6-Month Retroactive Rule (Yes, Really)

Here’s the surprise most people don’t see coming:

👉 When you enroll in Medicare after age 65, your Part A coverage starts 6 months earlier—retroactively.

So if you sign up in August, Medicare will backdate your Part A to February (as long as you were eligible then).

That means:

• Any HSA contributions you made during those 6 months can trigger a tax penalty.
• Even if you thought you were doing everything right 😬

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🛑 When Should You Stop HSA Contributions?

To be safe:

• Stop all HSA contributions 6 months before you apply for Medicare.
• This includes stopping employer contributions if you’re still working.

✅ Tip: Mark your calendar or talk to HR before applying.

It’s easy to miss this step.

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🧠 Planning Ahead: HSA Timing Tips

Here’s how to protect yourself:

• If you plan to work past 65 and want to keep using your HSA, don’t enroll in Medicare yet.
• Once you know when you’ll retire, stop HSA contributions at least 6 months before you enroll.
• After you enroll, you can still use your HSA funds for:
  • Medicare premiums
  • Copays
  • Deductibles
  • Dental and vision care

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💡 Smart planning can save you from IRS headaches—and make the most of your HSA for retirement.

🟦 IRMAA Considerations: Should High-Income Workers Delay?

If you’re still working past 65 and making a good income, you might run into something called IRMAA.

It sounds fancy, but don’t worry—we’ll break it down.

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💰 What Is IRMAA?

IRMAA stands for Income-Related Monthly Adjustment Amount.

It’s an extra charge added to your Medicare premiums if your income is above a certain level.

• It affects Part B and Part D
• It’s based on your tax return from 2 years ago
• The higher your income, the more you’ll pay each month

For example, in 2025:

• Most people pay $174.70 a month for Part B
• But higher earners could pay $240, $350, or even over $500

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📈 Should You Delay Medicare If You’re Still Earning Big?

✅ Maybe.

If you’re still working and have good employer coverage, delaying Medicare can help avoid triggering IRMAA too soon.

Here’s why:

• Medicare looks at your adjusted gross income from 2 years ago
• If you haven’t enrolled yet, you’re not paying IRMAA—even if you qualify
• Once you retire, your income might drop—lowering or eliminating IRMAA altogether

🧠 Smart tax timing = big Medicare savings.

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📍 Real-Life Examples

👨‍💼 David in Ohio: Still working at 67 with a $150k income. His company plan is solid, so he delays Medicare.

When he retires at 68, his income drops—and so does his IRMAA level, saving him over $1,000 a year.

👩‍⚕️ Angela in Virginia: Works part-time as a high-earning consultant. She signs up for Medicare at 65 and is surprised when IRMAA hits.

She could’ve avoided it if she waited and kept using her husband’s employer plan.

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🧾 Tax Strategy Planning Tips

• Delay Medicare (if safe) until your income falls
• Talk to a financial planner about Roth conversions or other income-lowering strategies before you retire
• Consider using your HSA or 401(k) to pay for IRMAA-related costs tax-free

💡 IRMAA doesn’t last forever. Once your income drops, you can file a reconsideration request with Social Security to lower your premiums.

🟦 How Medicare Works With Retiree Coverage and Union Plans

Many seniors think their retiree insurance or union plan lets them delay Medicare.

But here’s the truth:

🛑 Retiree insurance is NOT the same as active employer coverage.
And in most cases, it doesn’t protect you from late enrollment penalties.

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👷‍♂️ What’s the Difference?

• Active Employer Coverage: Comes from a current job (yours or your spouse’s). If the company has 20+ employees, it may allow you to delay Medicare safely.
• Retiree Coverage: Comes after you stop working. Even if it’s generous, Medicare expects you to enroll at 65.

📢 If you’re not actively working, Medicare becomes the primary insurance, and retiree plans only help after that.

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📍 Real-Life Examples

🪨 West Virginia (Coal Miners): Many retired miners receive union-backed health coverage.

But unless they enroll in Medicare at 65, those retiree plans won’t pay much — leaving them with big hospital bills and lifetime penalties.

👩‍🏫 Arkansas (Teachers): Retired public school employees often keep a health plan.

But if they skip Medicare Part B, their school coverage can reject claims — and Medicare may charge them a penalty for enrolling late.

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🤔 What Should You Do?

• Always check if your retiree plan requires Medicare enrollment at 65
• Don’t assume your plan is “good enough” to delay Medicare
• Ask your union or HR rep: “Do I need to sign up for Medicare to keep this coverage?”

💬 “If you’re retired and over 65, Medicare needs to be in place — or your coverage may not work the way you think.”

🟦 Your Checklist: What to Do Before Turning 65

Planning makes everything easier—and with Medicare, a little preparation can save you from costly mistakes.

Here’s your simple checklist to follow before you turn 65:

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✅ Medicare Prep Checklist

📇 Ask for a Medicare Coverage Letter
✔️ Request it from your HR or benefits department
✔️ Confirms your employer insurance is creditable
✔️ You’ll need this to delay Medicare without penalties

🏢 Know Your Group Size
✔️ Ask: “Does our company have 20 or more employees?”
✔️ This determines whether you can delay Part B safely
✔️ Smaller companies mean Medicare pays first

📆 Talk to a Medicare Expert – At Least 6 Months Ahead
✔️ Review your current plan and future options
✔️ Get help with timing and enrollment
✔️ Plan around your retirement date and income level

📞 Schedule Your Enrollment (or Delay) Strategy Call
✔️ Don’t wait until your birthday month
✔️ Leave time to gather documents and stop HSA contributions if needed

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📊 Visual Suggestion:

A friendly checklist graphic with:

• 🪪 Medicare card
• 📨 Employer coverage letter
• 📅 Calendar
• 📞 Phone call to a Medicare advisor

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💡 You don’t have to figure this out alone.
One quick conversation with a trusted expert can give you clarity and confidence—so you can step into Medicare with no regrets.

🟦 Still Unsure? Real Scenarios That Might Match Your Situation

Sometimes the best way to understand your own Medicare path is to see how others handled theirs.

Here are a few real-world examples that may sound familiar:

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👩‍⚕️ Case Study 1: Still Working with Employer Insurance

North Carolina – 67-Year-Old Nurse

Linda works full-time at a hospital in Wilmington with more than 500 employees.

Her group plan is excellent, and she’s still contributing to an HSA.

• ✅ She delayed Medicare Part B because her employer coverage is creditable.
• ✅ She didn’t enroll in Part A so she could keep using her HSA.
• 💬 She’s planning to stop working at 68 and has already scheduled a Medicare enrollment call.

Takeaway: If your job offers good coverage and you’re still working, delaying Medicare might make sense.

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👨‍🔧 Case Study 2: Retired with COBRA

Texas – 65-Year-Old Factory Worker

Miguel retired early from a manufacturing job in Houston.

He chose COBRA coverage to continue his health insurance and thought he could wait to sign up for Medicare.

• ❌ He delayed Part B, assuming COBRA was enough.
• ⚠️ When he tried to enroll in Medicare later, he was hit with a late enrollment penalty and had to wait months for coverage to begin.

Takeaway: COBRA does not provide creditable coverage for Medicare.

If you’re not actively working, always sign up for Part B at 65.

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👩‍💻 Case Study 3: Self-Employed with an HSA

Georgia – 66-Year-Old Consultant

Sharon runs a small consulting business in Savannah and uses a high-deductible plan with an HSA.

She delayed enrolling in Medicare so she could keep making HSA contributions.

• ✅ She planned ahead and stopped HSA contributions 6 months before applying.
• ✅ She’ll enroll in Part A and B when she retires at 67, penalty-free.
• 💡 She’s also working with her CPA to lower income before IRMAA kicks in.

Takeaway: If you’re self-employed, timing matters.

Know the HSA rules and stop contributions before enrolling in Medicare.

🟦 Conclusion: Why Palmetto Mutual Is Your Trusted Medicare Partner

Navigating Medicare while you’re still working (or considering retiring) can feel overwhelming—but it doesn’t have to be.

At Palmetto Mutual, we’re not some big, faceless call center.

We’re real people who care—licensed Medicare experts who take the time to walk you through everything, step-by-step.

✅ No pressure.
✅ No spam.
✅ Just honest, helpful advice.

Whether you’re in North Carolina, Texas, Georgia, or anywhere in between, we offer local guidance with a national reach.

We’ll help you avoid penalties, understand your options, and feel confident about your next step.

💬 “You don’t need to guess. You just need a guide.”

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📞 Let Palmetto Mutual guide you.

Whether you’re working, retiring, or not sure yet, we’ll ensure you avoid penalties and get the benefits you deserve.

👉 [Get Help With Medicare Now]