More and more of my clients are still working full time when they turn 65, and that changes the Medicare conversation quite a bit. If this is you, please don’t just let your birthday pass without thinking this through. The wrong assumption here can either cost you a permanent penalty or leave you with a coverage gap you didn’t see coming.
Start with one phone call: your employer
Before you decide anything about Medicare, find out from your employer’s benefits department whether you’re required to enroll in Medicare Part A and Part B at 65. The answer usually comes down to the size of your employer. Under federal law, companies with 20 or more employees generally have to offer you and your spouse the same health coverage they offer younger workers, which means you often get to choose whether to stay on that plan, switch to Medicare, or carry both. Smaller employers, under 20 employees, typically don’t have that requirement, and in that case Medicare often becomes primary whether you planned on it or not. Medicare.gov walks through this directly, and it’s worth reading before you assume anything.
Part A is usually an easy yes
Most people don’t pay a premium for Part A, so there’s rarely a downside to signing up for it at 65 even while working, with one exception. If you’re contributing to a Health Savings Account, enrolling in any part of Medicare stops new HSA contributions completely. That single detail catches a surprising number of people off guard, so if an HSA is part of your financial plan, that’s a conversation to have before you enroll, not after.
Part B is where the real decision lives
Unlike Part A, Part B carries a monthly premium, and if you enroll when you don’t need to, you’re paying for coverage that duplicates what your employer plan already gives you. If your employer coverage counts as creditable, meaning it’s considered as good as or better than Medicare, you can generally delay Part B penalty free. Once that job based coverage ends, whether from retirement or a layoff, you get an eight month Special Enrollment Period to sign up. Miss that window and you’re looking at a late enrollment penalty that can follow you for good.
A note for military families
This is a piece I think about differently than a lot of brokers, because I work with military retirees and their families every week. If you or your spouse have TRICARE For Life, the rules are not the same as a typical employer plan, and treating it like one is a mistake I see too often. TRICARE For Life is designed to work alongside Medicare, not instead of it, and for most military retirees, enrolling in Medicare Part B at 65 is required to keep TRICARE coverage active. This is one of those areas where general advice can actually steer you wrong, so if TRICARE is part of your picture, please talk to someone who specifically understands how the two programs interact.
The mistake I see most often
People assume that because they have coverage through work, Medicare can simply wait indefinitely with no consequences. Sometimes that’s true. Sometimes it isn’t, and the difference comes down to details like company size, whether your coverage is considered creditable, and whether you’re on a plan like TRICARE that has its own rules. Guessing wrong here doesn’t just cost a little. It can mean a permanent premium penalty or, in the case of TRICARE, a real gap in your coverage.
What I’d tell you if you called today
Bring me two things: how many employees your company has, and whether your HR department can confirm your coverage is creditable. With those two answers, we can map out exactly what you should do and when, without any guesswork. Our office handles this conversation daily, and it takes far less time than most people expect.
Call 877-549-1212 or email tmcmanamon@onesourcebenefits.com, and we’ll get you a straight answer.
Tracy McManamon, President, One Source Benefits, LLC
