Turning 65 doesn’t always mean you’re ready to jump to Medicare — especially if you’re still working and covered by employer insurance. But navigating Medicare alongside employer coverage has specific rules you need to understand to avoid costly penalties.
Can I Delay Medicare If I Have Employer Coverage?
Yes — with conditions. If you (or your spouse) are actively employed and the employer coverage comes from a company with 20 or more employees, you can delay Medicare Part B without penalty. The employer plan is the “primary payer” and Medicare is secondary.
If the employer has fewer than 20 employees, Medicare becomes primary automatically at 65 — meaning you should enroll in Part B on time to avoid coverage gaps.
What About Part A?
Most people should enroll in Part A at 65 even if they’re still working — it’s free for most people (40+ work quarters) and serves as secondary coverage. Exception: if you have an HSA, enrolling in Part A makes you ineligible to contribute further to the HSA.
Special Enrollment Period When You Retire
When you lose employer coverage (due to retirement or the company reducing below 20 employees), you get an 8-month Special Enrollment Period (SEP) to enroll in Medicare Part B without penalty. This is separate from AEP.
Key Penalty Warning
If you delay Part B enrollment without qualifying employer coverage, the penalty is 10% of the standard premium for every 12-month period you were eligible but didn’t enroll. It’s permanent and added to your monthly premium for life.
| Years Delayed | Penalty | Monthly Cost (2026) |
|---|---|---|
| 1 year | +10% | $203.50 |
| 2 years | +20% | $222.00 |
| 3 years | +30% | $240.50 |
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Paul Z. Olah · Licensed Medicare Broker · NPN 20795999 · 856-880-6340
COBRA and Medicare
COBRA coverage does not count as employer-based coverage for Medicare purposes. If you’re on COBRA after leaving work and don’t enroll in Medicare Part B within your SEP, you may face penalties.
Retiring soon or turning 65? Book a consultation before your SEP window closes.