Working Past 65: Stay on Employer Coverage or Enroll in Medicare?

More adults today are continuing their careers well past traditional retirement age of 65.  Some continue working by choice, for some it’s necessary, others often simply enjoy staying active and engaged.  A large number are waiting for full retirement age of their Social Security Benefits, which is now age 67.  If you’re still working and covered by an employer health plan when you turn 65, does Medicare automatically replace your current insurance?  The answer is: not always.

Understanding how employer insurance and Medicare work together can help you avoid penalties and make a confident decision. 

Confirm Your Employer Coverage First

Start by confirming with your employer’s benefits department that your health insurance continues beyond age 65.  If coverage remains available, the next step is comparing your employer plan with Medicare to determine which option best fits your situation.

Compare the Costs

Look at what you currently pay through payroll deductions and compare that with potential Medicare expenses.  For most people:

• Medicare Part A (hospital coverage) is premium-free if you worked at least 10 years (40 quarters) and paid Medicare taxes.

• Medicare Part B has a standard premium of $202.90 per month in 2026.

Higher-income individuals may pay an additional amount called IRMAA (Income-Related Monthly Adjustment Amount). This adjustment applies if your income reported two years earlier exceeds:

• $109,000 for individuals filing single

• $218,000 for married couples filing jointly

If your income has decreased due to retirement or another qualifying life event, you may request a review using Form SSA-44, which may reduce your premium going forward.

You should also compare the costs and benefits of available Medicare plan options.

Sometimes Medicare provides better value. Other times, employer coverage remains the stronger choice — especially if your plan also covers a spouse or dependent children, since Medicare is individual coverage.

Employer Size Matters  One of the most important factors is the size of your employer.

Employers With 20 or More Employees

If you are actively working for an employer with 20 or more employees, you can usually delay Medicare enrollment without penalty while remaining on your employer health plan.

When your employment or coverage ends, such as retirement, you qualify for a Special Enrollment Period to enroll in Medicare.  Some may choose to voluntarily enroll in Part A only during this time to obtain a Medicare number while continuing employer coverage.

Employers With Fewer Than 20 Employees

If your employer has fewer than 20 employees, Medicare generally becomes your primary insurance at age 65.  In this situation, failing to enroll in Medicare when eligible could result in coverage gaps or unexpected medical expenses.  This is why confirming employer size and coordination rules is essential.

Note: It is generally recommended to enroll in Medicare during your Initial Enrollment Period if you are:

• Retired

• Self-employed without qualifying group coverage

• Not covered by an active employer health plan

Making the Right Decision

There is no single answer that fits everyone. Some people remain comfortably on employer coverage for several years after turning 65. Others transition to Medicare right away.  The key is understanding when you can safely remain and when it’s time to step onto Medicare coverage.  Taking the time to review your options now can help ensure a smooth transition later, without penalties or surprises.

Diane AndreeABC Medicare Plans Broker631-337-3625

Helping you understand Medicare — one step at a time.

Medicare Versus Employer Coverage