You are turning 65 next spring and still working, with health insurance through your employer. Do you need to sign up for Medicare? If you get the timing wrong, you could face a penalty that lasts for the rest of your life — or a gap in coverage.
Key Takeaways
- Your Initial Enrollment Period lasts seven months: the three months before the month you turn 65, your birthday month, and the three months after.
- Missing it without qualifying coverage can trigger a Part B late enrollment penalty of 10% for each full 12-month period you were eligible but not enrolled — usually for life.
- If you or your spouse are still working and covered by an employer group plan, you may be able to delay Part B without penalty and use a Special Enrollment Period later.
- COBRA and retiree coverage do not count as current employment coverage for this purpose.
Rules have specific details and exceptions. Check medicare.gov or contact Social Security for your situation.
Medicare parts in brief
- Part A: hospital insurance. Most people pay no premium if they or their spouse worked and paid Medicare taxes for at least 10 years.
- Part B: medical insurance for doctor visits, outpatient care and more. Most people pay a monthly premium.
- Part D: prescription drug coverage, through private plans.
- Medicare Advantage (Part C): private plans that combine Parts A and B, often with Part D.
Automatic vs manual enrollment
If you are already receiving Social Security benefits when you turn 65, you are usually enrolled in Parts A and B automatically. Your Medicare card arrives in the mail.
If you are not yet receiving Social Security, you need to sign up yourself through Social Security.
The Initial Enrollment Period
Your Initial Enrollment Period (IEP) is seven months long:
- The three months before the month you turn 65
- The month you turn 65
- The three months after
Signing up in the months before your birthday month usually means coverage starts on the first day of your birthday month. Signing up later in the IEP generally means coverage starts the month after you enroll.
The Part B late enrollment penalty
If you do not enroll in Part B when first eligible and do not have qualifying coverage, you may pay a late enrollment penalty when you do sign up. The penalty is 10% of the standard Part B premium for each full 12-month period you could have had Part B but did not.
In most cases, you pay this penalty for as long as you have Part B.
You may also have to wait for the General Enrollment Period (January 1 to March 31) to sign up, with coverage starting the month after you enroll.
The employer-coverage exception
If you or your spouse are currently working and you have health coverage through that employer’s group health plan, you may be able to delay Part B without penalty. When the employment or coverage ends (whichever happens first), you have an eight-month Special Enrollment Period to sign up for Part B.
Important details:
- Employer size matters. If the employer has fewer than 20 employees, Medicare is often primary at 65, and you may need Parts A and B to avoid gaps. Ask the employer’s benefits administrator.
- COBRA does not count. If you leave work and take COBRA, your eight-month Special Enrollment Period starts when employment ends, not when COBRA ends.
- Retiree coverage does not count as current employment coverage.
Health savings accounts
If you contribute to a health savings account (HSA), you must stop contributions once you enroll in any part of Medicare. Premium-free Part A is often made retroactive up to six months when you sign up after 65, so many people stop HSA contributions six months before enrolling to avoid excess contributions.
Part D timing
Part D also has an initial enrollment period and a late enrollment penalty if you go 63 days or more without creditable drug coverage after your initial enrollment period. Employer drug coverage is usually creditable; your plan should tell you.
Practical checklist
- Three months before your 65th birthday month: decide whether to enroll now or delay.
- If still working: ask your employer about plan size and whether Medicare would be primary.
- If retiring: enroll during your IEP or within eight months of losing employer coverage.
- If you have an HSA: plan when to stop contributions.
- Keep records of employer coverage. You may need forms from your employer to prove coverage when enrolling later.
Frequently Asked Questions
Should I sign up for Part A even if I keep employer coverage? Many people do, since it is usually premium-free. However, if you contribute to an HSA, enrolling in Part A ends eligibility to contribute.
Can I delay Part B if I have VA benefits? VA coverage is not considered employer group coverage for Part B enrollment purposes. Consider the rules carefully.
What if I missed my enrollment period? Contact Social Security. You may qualify for a Special Enrollment Period or need to use the General Enrollment Period.
Does the penalty ever go away? In most cases it lasts as long as you have Part B.
The bottom line
Turning 65 starts a seven-month clock. Enroll during your Initial Enrollment Period unless you have qualifying current employer coverage, and keep records so you can enroll later without penalty.
