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Medicare While You're Still Working at 65
A lot of people hit 65, look at their employer plan, and figure Medicare is a problem for later. Sometimes that is exactly right -- and sometimes it costs people money or a penalty they did not see coming. The honest answer is: it depends on your employer, your coverage, and your situation, and it is worth a short conversation before you decide. Retirement Resources is a local, independent St. Louis agency, and we will sort it out with you at no cost. Call or text the Retirement Resources team at (314) 248-6500.
First, the timing question -- do you have to take Part B?
This is where the penalties hide, so it is worth getting right. The rule comes down to the size of your employer:
- 20 or more employees: Your employer coverage is usually primary, and you can generally delay Part B without a penalty. When you eventually leave that coverage, a Special Enrollment Period opens so you can pick up Part B without a late fee.
- Fewer than 20 employees: Medicare is usually primary, which means you typically want to enroll in Part B at 65 -- if you do not, your employer plan may pay as if you already had it, and you could be left with gaps.
Bottom line: the right move depends on which bucket your employer falls in, so confirm it before you decide -- so you do not enroll too early or too late.
The HSA catch most people miss
Here is one that surprises people. If you contribute to a Health Savings Account (HSA), enrolling in any part of Medicare -- even the free Part A -- stops you from being allowed to make new HSA contributions. You keep what is already in the account, but new deposits have to stop. If you are still funding an HSA, this is worth planning around before you sign up for anything, so you do not trip over a tax rule by accident.
What about Part A? It is usually free.
Part A is something you have already paid for your entire working life -- most people pay no premium for it. For a lot of people it makes sense to take Part A at 65 even while working. The HSA situation above is the main reason someone might wait. We will tell you straight which one applies to you.
It is worth a look, even if you are happy with your plan
Medicare is something you have paid into your whole working life -- you owe it to yourself to at least compare your options and take advantage of what you are entitled to, if it makes sense for you. Here is what many people do not realize: once you are Medicare-eligible, you are allowed to leave your employer plan and move to Medicare if you want to.
For some people, a Medicare plan can mean a lower deductible, lower copays, a lower out-of-pocket maximum, a lower premium, and more extra benefits than what they have at work -- but whether it actually comes out ahead depends entirely on your situation, which is exactly why a side-by-side comparison is worth it. We will do that math with you, plainly, and if your employer plan is genuinely the better deal, we will tell you to stay where you are. It is your call -- we just want you to make it with the full picture in front of you.
When you do leave your employer plan
When your job-based coverage ends, an 8-month Special Enrollment Period opens for Part B. Here is the catch that trips people up: that clock starts when your employment, or the group coverage tied to it, ends -- not when COBRA ends. COBRA does not extend your Part B window, so do not treat it as your bridge. Tell us as soon as you know your coverage is changing and we will line up the timing so there is no gap and no penalty.
How we help -- and what it costs you
Nothing. Our help is free to you; agents are paid by the insurance carriers, and that does not change your premium. When you work with us, you get a local team that has helped thousands of families with Medicare since 2013. Your options are reviewed by our licensed Medicare specialists, including Katie, licensed in Missouri, Illinois, and Florida. We live and work here and stay with you year after year.
Frequently asked questions
Do I have to enroll in Medicare at 65 if I am still working?
Not always. With qualifying employer coverage from a larger employer, you may be able to delay Part B without a penalty and enroll later through a Special Enrollment Period. With a smaller employer, Medicare is usually primary and you typically should enroll. The right answer depends on your employer's size.
Can I drop my employer plan and go on Medicare instead?
Yes, once you are Medicare-eligible you can leave your employer plan and move to Medicare. Whether that comes out ahead depends on your specific situation, which is why we do a side-by-side comparison before you decide.
Does Part A affect my HSA?
Yes. Enrolling in Medicare -- including the free Part A -- means you can no longer make new HSA contributions. You keep your existing balance. If you are still funding an HSA, plan the timing before you enroll.
Is COBRA good enough to delay Part B?
This is one of the most common mix-ups in Medicare. For Part B, what matters is coverage based on current employment -- and COBRA is continuation coverage, not current-employment coverage. That means COBRA does not give you a Part B Special Enrollment Period and does not protect you from the Part B late penalty. (COBRA drug coverage can sometimes count as creditable coverage for the separate Part D penalty -- that is a different rule, and it is where the confusion usually comes from.) Bottom line: if you are on COBRA at 65, do not assume it covers you for Part B. Talk to us before your enrollment window closes.
Still working and not sure what to do? Let's look at it -- free.
Call or text the Retirement Resources team: (314) 248-6500
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