Working Past Age 65?
This educational resource is provided by CHL Insurance Solutions, a local independent agency. This page is intended for informational purposes only and does not constitute medical, legal, tax, financial advice, nor is it an offer of insurance or a sales solicitation.
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Navigating the Transition: What to Know if You Are Working While Aging Into Medicare
Turning 65 is a significant milestone, but if you are still in the workforce, it often comes with a complex question: What happens to my healthcare coverage? Many people believe they must sign up for Medicare the moment they turn 65, regardless of their employment status. However, the reality is more nuanced. Understanding your options now can help you avoid lifelong late-enrollment penalties and ensure you have the most cost-effective coverage for your needs.
The Magic Number: 20 Employees
The first step in your decision-making process is looking at the size of your current employer. This determines whether your employer coverage or Medicare pays first.
Employers with 20 or more employees: Generally, your group health plan is the primary payer. This means you may be able to delay Medicare Part B without penalty.
Employers with fewer than 20 employees: Medicare usually becomes the primary payer at age 65. In this case, you typically need to enroll in Medicare to avoid significant gaps in coverage, as your small business plan may not pay until Medicare has paid its share.
Understanding the Parts of Medicare
As you evaluate your transition, it is helpful to break Medicare down into its primary components:
Part A (Hospital Insurance): For most people who have worked at least 10 years in the U.S., Part A is premium-free. Many people choose to enroll in Part A at 65 even if they are still working, as it can act as secondary coverage for hospital stays.
Part B (Medical Insurance): Part B carries a monthly premium. If you have "creditable" coverage through a large employer, you might choose to delay this to save on premium costs.
Part D (Prescription Drug Coverage): You will want to verify if your employer’s drug coverage is considered "creditable" by Medicare standards. If it is not, you may need to join a Part D plan to avoid a future penalty.
Important Considerations for HSA Users
If you contribute to a Health Savings Account (HSA), there is a specific rule you must keep in mind. Once you enroll in any part of Medicare (including premium-free Part A), you can no longer make tax-advantaged contributions to your HSA.
If you plan to keep contributing to your HSA, you may need to delay enrolling in Medicare entirely. It is often advised to stop HSA contributions at least six months before you eventually apply for Medicare to avoid tax complications.
When to Take Action
If you are covered by a large employer group plan, you are usually eligible for a Special Enrollment Period (SEP). This allows you to sign up for Medicare at any time while you are still working or during the eight-month period that begins the month after your employment or group coverage ends.
Note: COBRA and retiree coverage are not considered "current employment" coverage. If you are on COBRA, you generally must sign up for Medicare during your initial transition period to avoid late-enrollment penalties.
Next Steps
Every individual’s situation is unique. To make the best choice for your health and your budget, consider the following:
Compare your current employer plan’s premiums, deductibles, and out-of-pocket maximums against Medicare options.
Consult with your Human Resources department to see how your specific plan coordinates with Medicare.
Speak with a licensed insurance agent or a Medicare counselor to review the timelines specific to your birth month.
Taking the time to educate yourself now ensures that your transition into Medicare is seamless, whether it happens today or several years down the road.
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Important Disclaimer: This material is for educational purposes only and does not constitute personal advice or a recommendation about your specific healthcare coverage decisions. Your situation depends on factors including your employer’s size, your group plan’s creditable coverage status, your HSA participation, and your birth month. Before making enrollment decisions, consult with your employer’s Human Resources department, your State Health Insurance Program (SHIP), or a licensed insurance agent who can review your individual circumstances. For authoritative information about Medicare, visit Medicare.gov, or call 1-800-MEDICARE.
TPMO Disclaimer: We do not offer every plan available in your area. Currently we represent 5 organizations which offer 55 products in your area. Please contact Medicare.gov, 1‑800‑MEDICARE, or your local State Health Insurance Program (SHIP) to get information on all of your options.
Note: Organization and Product counts are based on the Gainesville, FL area. Actual plans available may vary based on your zip code.
Non-Government Entity: CHL Insurance Solutions, LLC is a private, licensed insurance agency (FL Lic: L131407; GA Lic: 241106). We are not part of the federal Medicare program.
