Working Past 65 - What You Need to Know

Reaching age 65 is a major milestone - not just in life, but when it comes to your healthcare coverage. Many people assume they must enroll in Medicare at age 65, but what if you're still working? What if you have great coverage through your employer or your spouse's employer? The good news is, you have options! The not-so-good news is, making the wrong choice can lead to costly penalties or gaps in coverage. Let's break down what you need to know if you plan to keep working past the age of 65. 

Medicare Basics at a Glance

At 65, you become eligible for Medicare, the federal health insurance program for people age 65 and older (and some under 65 with disabilities).
Part A (Hospital Insurance) covers inpatient hospital care, skilled nursing, hospice, and some home health. It is usually premium-free if you or your spouse worked for 10+ years.
Part B (Medical Insurance) covers doctor visits, outpatient care, preventive services, and durable medical equipment. It comes with a monthly premium (in 2025, most pay $174.70 per month, but this can vary based on income).
Part C (Medicare Advantage) is an alternative to Original Medicare, and is offered by private insurance companies.
Part D (Prescription Drug Coverage) covers most outpatient prescription medications.
Medigap (Medicare Supplement) provides optional plans that help pay for some out-of-pocket costs not covered by Original Medicare.

Still Working? Stick with Your Employer Coverage

Whether or not you need to enroll in Medicare at 65 largely depends on you (or your spouse's) employer coverage. If the employer has 20 or more employees, you can delay enrolling in Medicare Part B without penalty. Your employer plan is considered creditable coverage. Medicare is secondary and your employer insurance is primary (pays first). If you are sticking with your employer plan (or spouse's employer plan), you may enroll in Part A only (if you're not contributing to an HSA). You can delay enrolling in Part B, Part D, and Medigap or Medicare Advantage.

If you (or your spouse's) employer has fewer than 20 employees, you generally must enroll in Medicare at age 65. Medicare becomes primary (pays first) and your group plan becomes secondary. Not enrolling in Medicare could mean denied claims or higher out-of-pocket costs.

Should You Take Part A at 65?

For most people, Part A is premium-free, so enrolling can be a smart move even if you're still working. However, if you have an HSA (Health Savings Account), you'll want to wait. Once you enroll in any part of Medicare, you can no longer contribute to an HSA. This can have tax implications, so consult with a financial or tax advisor before enrolling.

What Happens When You Retire?

When you eventually retire, or lose employer coverage, you'll qualify for a Special Enrollment Period (SEP). You have 8 months to sign up for a Part B (and up to 63 days for Part D). You won't face a late enrollment penalty if you had creditable coverage while working. It's best to enroll before your employer coverage ends to avoid any gap in care. This SEP is crucial, waiting too long could mean a Part B late enrollment penalty (10% per year you delayed for life) and a Part D penalty (1% of the national base premium for every month without coverage).

What If You are covered by Your Spouse's Employer?

If you are covered by your spouse's employer, the same rules generally apply...if the employer has 20 or more employees, you can delay enrolling in Part B. If the employer has fewer than 20 employees, Medicare becomes primary, and you may need to enroll. Check with the employer's HR department to confirm the plan's rules and whether it qualifies as creditable coverage.

Common Mistakes to Avoid

1. Assuming you're automatically enrolled. You must actively enroll unless you're already collecting social security.

2. Delaying Medicare without checking your employer's size.  This can cause denied claims or permanent penalties.

3. Overlapping coverage unnecessarily. You might pay for both employer insurance and Medicare without getting extra benefits.

4. Forgetting about Part D. You still need creditable drug coverage or could face a late penalty later. 
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Planning Ahead

Each person's situation is unique, and there's no one-size-fits-all answer. Here are a few questions to ask yourself:

Does my employer coverage cost more than Medicare would? Medicare can be significantly cheaper than employer sponsored insurance, especially when you are just covering yourself and not any dependents. If your employer plan is expensive, it's possible that you could save a lot by retiring and enrolling in Medicare.

Who needs coverage? Are you covering a spouse or dependents on your employer plan? Medicare does not cover them. This is a big reason some delay retirement until their spouse turns 65.
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Are you currently contributing to a Health Savings Account (HSA)? If you are enrolled in Medicare, you cannot contribute to a Health Savings Account (HSA) anymore. If HSA contributions are a key part of your strategy, you might want to delay Medicare (and retirement).

Let's Make a Plan Together

If you are approaching 65 and still working, now is the time to review your Medicare options. We help people every day compare costs, avoid penalties, and create a plan that fits their needs- whether they're retiring soon or working into  their 70's.

Reach out for a no pressure, personalized, free consultation. Medicare is a major decision, but you do not have to figure it out alone!

​To Get Help Now, Call Our Office!

​Rob and Carrie Davies
Prairie Grove Insurance
800-254-5200
​608-839-0275