Turning 65 and Still Working: Medicare Basics

Turning 65 while you still have health insurance from a job raises a big question: do you have to sign up for Medicare now? The answer depends on your situation, and getting it wrong can cost you money for life. This guide walks through the basics using Medicare.gov and Social Security information.

When can I first sign up for Medicare?

Medicare.gov says your first chance is your Initial Enrollment Period. It lasts 7 months: it starts 3 months before the month you turn 65 and ends 3 months after the month you turn 65.

Social Security adds that if you are 65 or older and already get Social Security benefits, you are automatically enrolled in Part A.

Do I have to sign up at 65 if I have insurance from work?

Not always. Medicare.gov says that if you (or your spouse) are still working and have group health insurance from that job that's available to everyone at the company:

• If you don't have to pay a premium for Part A (hospital insurance), you can choose to sign up at 65 or any time later.
• You can wait to sign up for Part B (medical insurance) until you or your spouse stop working, or lose that coverage if that happens first, and you won't pay a late enrollment penalty.

But Medicare.gov also says to ask the employer that provides your insurance whether you need Part A and Part B at 65. If you don't sign up when you need to, your job-based insurance might not cover your costs.

Why does the size of my employer matter?

It decides who pays your bills first. Medicare.gov's "Who pays first?" rules say that if you are 65 or older and covered through your own or your spouse's current job:

Medicare.gov notes an exception: if a small employer is part of a multi-employer plan where at least one employer has 20 or more employees, the group plan generally pays first.

Why it matters: if Medicare is supposed to pay first and you don't have Part B, there may be a big gap. That's why it's so important to ask your benefits administrator.

What happens when I stop working?

Medicare.gov and Social Security describe a Special Enrollment Period. You can sign up for Part B without a penalty:

• Any time while you're still covered by the group health plan from current work, or
• Within 8 months after the job or the group coverage ends, whichever happens first.

Medicare.gov says that if your employer coverage is ending, sign up for Medicare about a month before it ends to help avoid a gap.

Does COBRA count?

No. Medicare.gov says your 8-month window starts when you stop working (or lose your job-based insurance), even if you choose COBRA, and that COBRA doesn't extend your limited time to sign up. Medicare.gov also says COBRA or retiree coverage ending doesn't qualify you for a Special Enrollment Period. If you're on COBRA and haven't signed up for Medicare, Medicare.gov says to sign up when you turn 65 to avoid gaps in coverage and a Part B late penalty. See COBRA explained.

What does the penalty look like?

Medicare.gov says that if you don't sign up for Part B when you should, you may pay an extra 10% for each full 12-month period you could have had Part B but didn't. The penalty is added to your monthly premium, usually for as long as you have Part B.

For 2026, Medicare.gov lists the standard Part B premium as $202.90 a month (some people pay more based on income) and the Part B deductible as $283 for the year. Medicare.gov's own example for 2026: waiting 2 full years without qualifying for a Special Enrollment Period means a 20% penalty, for a monthly premium of about $243.50 in 2026. As of November 1, 2026, Medicare.gov still showed the 2026 amounts; the 2027 amounts had not been posted there yet.

For drug coverage, Medicare.gov says you can wait to join a Medicare drug plan as long as you have creditable drug coverage (coverage similar in value to Part D). Its penalties page says the Part D late penalty can apply if you go 63 days or more without creditable drug coverage. If you aren't sure your plan's drug coverage is creditable, Medicare.gov says to ask your plan, which has to tell you and will also send you this information every year. Keep what it sends you.

I have an HSA. What changes?

This trips people up.

• No new HSA money once you're on Medicare. IRS Publication 969 says your HSA contribution limit is zero starting the first month you are enrolled in Medicare.
• Part A can be backdated. Medicare.gov and Social Security say that if you sign up for premium-free Part A after 65, coverage can start up to 6 months back (but not before the month you turned 65). The IRS says contributions made during that backdated period count as excess.
• Plan ahead. Medicare.gov suggests you and your employer stop HSA contributions 6 months before you retire or apply for Social Security benefits.
• You can still spend HSA money you already have. Publication 969 says it can even pay Medicare premiums if you're 65 or older (but not Medigap). See What is an HSA?

Questions to ask HR before your 65th birthday

1. How many employees does the company have for Medicare purposes? Does our plan pay first or second?
2. Do I need to sign up for Part A, Part B, or both to keep full benefits?
3. Is our prescription drug coverage creditable?
4. If I'm in an HSA plan, when should I stop contributions?

For free, one-on-one help, Medicare.gov points people to their local State Health Insurance Assistance Program (SHIP).