Do you need Medicare if you keep working past 65?

Employer size changes the rules

The size of the employer decides who pays first for your medical bills. If your or your spouse's employer has 20 or more employees, its group health plan usually pays before Medicare. This setup often allows you to delay signing up for Part B without facing a late enrollment penalty. You can wait until you stop working or lose that specific health insurance to enroll.

At a company with fewer than 20 employees, job-based coverage might not pay for your care unless you have both Part A and Part B. In that case, sign up for both parts when you first become eligible. Delaying your enrollment can result in higher monthly costs later. Always verify your specific situation with your benefits administrator to confirm the payment order.

Understanding the eight-month window

When you stop working or lose your job-based health insurance, you enter a Special Enrollment Period. This window lasts for eight months, during which you can sign up for Part B without a penalty. This period begins immediately when your employment ends or your coverage is lost, whichever happens first. It does not pause if you choose other types of insurance during this time.

To avoid a gap in your medical benefits, plan your timing carefully. You should apply for Medicare about one month before your current employer coverage ends. Your new Medicare coverage will start the month after the processing agency receives your completed forms. Signing up before your job coverage ends helps you avoid a gap.

COBRA and retiree coverage details

COBRA allows you to keep your employer's group health plan for a limited time after leaving a job. If you have COBRA but have not yet enrolled in Medicare, the COBRA plan may pay only a small portion of your health care services. You might be responsible for most of the costs yourself. Contact your COBRA plan to ask what percentage they cover in this situation.

Retiree coverage from a previous job works differently. If you have both Medicare and retiree coverage, Medicare generally pays first for your health care bills. Your retiree plan may then cover some of the remaining costs. You must check with your benefits administrator to see if your specific retiree plan requires you to hold Part A alongside Part B to receive full benefits.

Avoiding late enrollment penalties

Missing your enrollment window can lead to permanent financial consequences. If you wait to sign up for Part B and do not qualify for a Special Enrollment Period, you will pay an extra 10% for each year you could have signed up. This penalty stays on your monthly premium for as long as you have Part B. The amount increases the longer you wait to enroll.

For Part A, some people must buy it because they do not qualify for premium-free coverage. If you have to buy Part A and do not do so when you are first eligible, your monthly premium may go up 10%. You will have to pay this higher amount for twice the number of years you did not sign up. For example, if you were eligible for two years but did not sign up, you will pay the higher premium for four years.

Next steps for your coverage

Review your current health insurance documents to understand your specific benefits. Determine if your employer offers supplemental plans or drug coverage that works with Medicare. If you have a Health Savings Account, you and your employer should stop contributing six months before you retire or apply for benefits. This step helps you avoid a tax penalty associated with having that account while enrolled in Medicare.

Common questions

Last reviewed October 2026. Medicare rules, dates and dollar amounts can change each year; Medicare.gov has the official details.