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What to know about Medicare and working past 65

When to sign up for Medicare if you're still working

This article was last updated on Aug. 24, 2021. 

As far as retirement age goes, there is no “new normal.” It’s true, 64 percent of Americans leave the workplace between ages 55 and 65 External Site. But, that doesn’t mean they’re saying goodbye forever. Nearly half of retirees External Site opt for part-time work or pursue a second career. Still, others continue working uninterrupted well past 65 years old. By 2026, it’s estimated 30.2 percent of people ages 65 to 74 will be in the workforce External Site, up from just 17.5 percent in 1996.

If you’re 65 or older and employed, you are most likely wondering “can I use Medicare if I am still working?”. It is important to know how Medicare works, particularly if you or your spouse are enrolled in a health plan through an employer. Medicare eligibility begins at age 65, and signing up on time can help you avoid penalties later. But if you’re working at 65 years old, you get a bit more flexibility.

5 things to know about Medicare while still working

part A part B part D options working past 65

If you are employed, but do not have health coverage from your current or former employer, you should enroll in Medicare Parts A and B during the Initial Enrollment Period. But, if you have health coverage from your employer or through your spouse’s employer, you may not have to enroll in Medicare immediately.

Read on for more details on the vital question many ask “do you have to sign up for Medicare at 65?”.

  1. In most cases, it’s a good idea to sign up for Part A

    Medicare Part A provides coverage for in-patient hospital stays, care in a skilled nursing facility, hospice care and some home care. Most people benefit by enrolling in Medicare Part A at age 65, regardless of whether or not they continue to work. Generally, Medicare Part A can serve as your secondary insurance and potentially pick up the tab for anything your employer coverage doesn’t cover. So if you’re wondering about when to apply for Medicare if you’re still working, consider enrolling when you turn 65 will help you avoid gaps in coverage later.

    If you’re receiving Social Security benefits, you are automatically enrolled in Medicare Part A at 65 years old. If you’re not receiving benefits, you would need to sign up for Part A during your Initial Enrollment Period. This is a seven-month window that includes the three months before you turn 65, your birthday month, and the three months following your birthday.

  2. The cost of Medicare Part A is typically free

    You are eligible for premium-free Part A External Site if you are age 65 or older and you or your spouse worked and paid Medicare taxes for at least 10 years. If you don't qualify for premium-free Part A, you can purchase it External Site. In most cases, if you choose to buy Part A, you must also have Medicare Part B and pay the monthly premiums for Parts A and B.

  3. Whether or not you enroll in Medicare Part B depends on the size of your employer

    Medicare Part B covers doctors' services, outpatient care, preventive services, home health care and other medical services. With Medicare Part B, you will pay a monthly premium.

    If your company has 20 or more employees, you can delay enrolling in Part B without worrying about a late-enrollment penalty or a gap in coverage. Your employer’s coverage will be your primary insurance. When you leave your job, you need to sign up for Part B within eight months or you might have to wait until the next General Enrollment Period.

    If your company has fewer than 20 employees, your employer will likely require you to enroll in Medicare part B when you turn 65. If so, Medicare will become your primary coverage and your employer’s insurance plan would become secondary. If you don't sign up for Part B as soon as you're eligible, you may have to pay a penalty, and there could be a delay in coverage.

  4. You can no longer contribute to a health savings account (HSA) once you enroll in Medicare

    Once you enroll in Medicare, you can no longer contribute toward your HSA. However, you may still use your HSA to pay for qualifying expenses.

    If you have employer-sponsored coverage with an HSA, you may want to delay signing up for Medicare External Site. Contact your human resources department or tax advisor for more details.

  5. You may need Medicare Part D (prescription drug plan)

    Prescription drugs are not covered under Medicare Part A or B. Whether or not you sign up for a Part D plan depends on if your employer group has a prescription drug plan that’s considered “creditable,” meaning that your coverage is expected to pay, on average, as much as the standard Medicare prescription drug plan.

    A human resources representative from your employer group can help you determine if you should sign up for Part D coverage:

    • If it’s creditable, you don’t have to sign up for Part D at 65 years old. When your employer coverage ends, you'll have a two-month special enrollment period to sign up for a Part D plan without penalty.
    • If it's not creditable, you will need to enroll in Part D during your initial enrollment period at 65.

Get more answers with our free guide

If you're new to Medicare or just starting to consider your options, and you live in Iowa or South Dakota, you can request our free Medicare Get-Ready guide Opens New Window to learn the basics about Medicare, when you’re eligible to enroll and your medical, dental and vision coverage options.