Medicare while you're still working
More Capital Region residents work past 65 every year — and the Medicare rules for them are the ones most often gotten wrong, by employees and HR departments alike. The decisions are few, but the penalties for the wrong ones are permanent.
If your employer has 20 or more employees and you're on its health plan, you can take premium-free Part A (unless you're contributing to an HSA) and delay Part B and Part D with no penalty; you get an 8-month Special Enrollment Period for Part B when the job or coverage ends. If the employer has fewer than 20 employees, Medicare is primary at 65 and you need Part B on time. COBRA and retiree coverage don't count as employer coverage for this purpose, so the 8-month clock starts when you stop working, not when COBRA ends.
The decision tree
- Is the coverage from current employment — yours or your spouse's? (Retiree coverage and COBRA don't count.)
- Does the employer have 20 or more employees? If yes, the employer plan pays first and delaying Part B is usually the sensible choice. If no, Medicare pays first — enroll at 65 even though a Special Enrollment Period may technically be available.
- Are you contributing to an HSA? If yes, delay Part A too, and plan the six-month look-back before you enroll.
- Is the employer's drug coverage creditable? Get the annual notice in writing. If it is, you can delay Part D without penalty. If it isn't, you need Part D from 65.
| Situation | Part A | Part B | Part D |
|---|---|---|---|
| Employer 20+, no HSA | Take at 65 | Delay | Delay if creditable |
| Employer 20+, contributing to HSA | Delay | Delay | Delay if creditable |
| Employer under 20 | Take at 65 | Take at 65 | Take at 65 or confirm creditable |
| COBRA or retiree coverage | Take at 65 | Take at 65 | Take at 65 or confirm creditable |
| Self-employed, marketplace plan | Take at 65 | Take at 65 | Take at 65 |
The penalties, so you know what's at stake
- Part B: 10% of the premium for every 12 months you could have had Part B and didn't, for life — and you may have to wait for the General Enrollment Period (January–March) to enroll at all.
- Part D: 1% of the national base premium for every month without creditable coverage after your Initial Enrollment Period, for life.
- HSA: excess contributions are taxed and penalized; the six-month Part A backdating is what catches people.
What would a late-enrollment penalty cost?
Enter the months you went without coverage after you were first eligible. Employer coverage from a company with 20 or more employees doesn't count as a gap for Part B; any creditable drug coverage doesn't count for Part D.
- Part B penalty
- —per month, for as long as you have Part B
- Part D penalty
- —per month, for as long as you have Part D
- Together, over 10 years
- —at 2026 rates; premiums rise most years
Based on the 2026 standard Part B premium ($202.90) and Part D base premium ($38.99). Penalties are recalculated each year as those figures change. Part B penalties usually end at 65 for people who had Medicare because of disability; otherwise both are permanent. An estimate, not a determination — Social Security and your Part D plan set the actual amounts.
When you stop working
- Ask HR for CMS-L564 (Request for Employment Information) before your last day — it's much harder to get afterwards.
- Submit it with CMS-40B to Social Security during the 8-month Special Enrollment Period. Do it the month before coverage ends so Part B starts the day after.
- Choose your gap-filling coverage — Medigap plus Part D, or Medicare Advantage — within 2 months of losing employer drug coverage. This 2-month window is shorter than the Part B window and is the one people miss.
- If you're retiring with income dropping sharply, look at an IRMAA appeal at the same time.
Which window is open for you today, with the dates: the enrollment check, five questions.
Employer coverage isn't always the better deal
If you're paying a large employee contribution for a high-deductible plan, Medicare with a Medigap policy may cost less and cover more — even while you're still working. Run the numbers with your benefits administrator rather than assuming — and note that employers with 20 or more employees generally can't offer you incentives to drop their plan for Medicare.
Where Social Security fits
Working past 65 usually also means delaying Social Security, which is often the right call — benefits grow until 70. Just remember that if you do claim while working before full retirement age, the earnings test applies, and that claiming after 65 triggers the Part A backdating that matters for HSAs. Both fit into a single claiming and Medicare review.
If you're anywhere near 65 and still working, a fifteen-minute call now can prevent a permanent penalty later. Book a review — no fee.
By county: Albany · Saratoga · Schenectady · Rensselaer · Warren · Washington · Montgomery · Fulton · Columbia · Greene · Schoharie · Otsego · Herkimer · Hamilton · Essex · Ulster · Dutchess. Town pages: every town, grouped by county. Anywhere else in New York.
- Working past 65 (medicare.gov)
- COBRA coverage and Medicare (medicare.gov)
- When does Medicare coverage start? (medicare.gov) — 8-month Special Enrollment Period
- Avoid late enrollment penalties (medicare.gov)
- Revenue Procedure 2026-24 (IRS) — 2027 HSA limits $4,500 self-only, $9,000 family; read October 16, 2026
- Publication 969, Health Savings Accounts (IRS) — limit is zero from the first month enrolled in Medicare, including retroactive coverage; $1,000 additional contribution at 55 or older; July-enrollment example at 6/12 of the limit; read October 16, 2026
We do not offer every plan available in your area. Currently we represent 10 organizations which offer 81 products in your area. Please contact Medicare.gov or 1-800-MEDICARE to get information on all of your options. 1-800-MEDICARE (TTY 1-877-486-2048) is available 24 hours a day, 7 days a week. Insurers' legal names and home offices: carriers page.
Common questions
Short answers to what people ask before they call.
Still have a question? Call (518) 902-8822 or book a call.
My employer has more than 20 employees. What should I do at 65?
Usually: take premium-free Part A (unless you're contributing to an HSA), delay Part B and Part D while you're covered by the employer plan, and confirm in writing that the plan's drug coverage is creditable. Your employer plan stays primary; you get an 8-month Special Enrollment Period for Part B when the job or coverage ends, with no penalty.
My employer has fewer than 20 employees. Does that change things?
Yes, significantly. With fewer than 20 employees, Medicare becomes your primary coverage at 65 and the employer plan pays second — which means if you haven't enrolled in Part B, the employer plan may pay almost nothing. Enroll in A and B during your Initial Enrollment Period.
I have a Health Savings Account. Can I keep contributing?
Not once you're enrolled in any part of Medicare, including premium-free Part A. And if you claim Social Security after 65, Part A is backdated up to six months — so stop contributions six months before you plan to enroll or you'll owe tax and penalties on the excess. Many people delay Part A entirely to keep the HSA going.
How much can I put in my HSA in the year Medicare starts?
Only a share of the year's limit. For 2027 the IRS limit is $4,500 for self-only coverage or $9,000 for family coverage, plus an extra $1,000 if you're 55 or older. From the first month you're enrolled in Medicare your limit is zero, including months covered by backdated Part A, so you count only the months before it: IRS Publication 969's example of someone enrolled in July allows six-twelfths of the year's limit. Your employer's contributions count toward the same limit.
Does COBRA let me delay Part B?
No. COBRA is not coverage from current employment, so it doesn't earn you a Special Enrollment Period. If you leave work at 64 and take COBRA, you still need Part B in your Initial Enrollment Period at 65. Taking COBRA after 65 and skipping Part B is one of the most expensive Medicare mistakes there is.
My spouse is 65 and covered under my employer plan. Same rules?
Yes — the spouse can delay Part B while covered by the working spouse's employer plan (20+ employees), and gets the same 8-month SEP when that coverage ends. The employer-size rule applies to the employer, not to whose name the policy is in.
What do I need when I finally retire?
Form CMS-L564 completed by the employer (proof of coverage), plus CMS-40B to enroll in Part B. Apply during the 8-month window, ideally the month before coverage ends so there's no gap. You then have 2 months from losing employer drug coverage to join Part D or a Medicare Advantage plan — arrange the start date before the old coverage ends so there's no gap.
Not sure whether to delay Part B?
Tell me who covers you today and how many employees they have. That answers most of it in one call.