If you are turning 65 in 2026 and still working, the answer hinges on one number: how many people your employer has. If the employer providing your health plan has 20 or more employees, you can generally delay Medicare Part B with no penalty for as long as you keep working and stay on that plan. If the employer has fewer than 20 employees, Medicare becomes your primary payer at 65, and delaying Part B can leave most of your medical bills unpaid. Almost everyone should still take premium-free Part A, with one important exception: people contributing to a health savings account.
That is the whole decision in a paragraph. The rest of this guide covers how to confirm your employer's size, the 8-month window after you stop working, the HSA timing trap that costs people thousands, and why COBRA and retiree coverage do not protect you the way active employment does.
The 20-Employee Rule Decides Everything
Medicare's coordination of benefits rules determine which plan pays first. That ordering, not your preference, decides whether delaying Part B is safe.
| Employer size | Who pays first | Can you delay Part B? | What happens if you delay anyway |
|---|
| 20 or more employees | Employer group health plan | Yes, penalty free while actively employed | Nothing. You get a Special Enrollment Period later |
| Fewer than 20 employees | Medicare | No, you should enroll in Part A and Part B at 65 | The group plan may pay only its secondary share, leaving you responsible for what Part B would have covered |
| Multi-employer or union plan | Depends on plan rules | Ask the plan administrator in writing | Varies, do not guess |
The count includes all employees of the company, not just those enrolled in the health plan, and it generally applies if the employer had 20 or more employees for at least 20 calendar weeks in the current or preceding year. Part-time employees count. Owners count.
Small-employer workers are the group that gets hurt most often. Someone at a 12-person firm keeps the group plan, skips Part B, and then finds out after a hospital stay that the group plan only ever intended to pay as the secondary payer. Medicare would have paid first, but there was no Medicare. The gap is the patient's.
Call your HR department or benefits administrator and ask two specific questions: how many employees does the company have for Medicare secondary payer purposes, and is our plan primary or secondary to Medicare for employees age 65 and over. Ask for the answer in writing or email.
Part A: Take It, Unless You Have an HSA
Part A is premium free if you or your spouse worked at least 40 quarters (about 10 years) paying Medicare payroll taxes. For 2026, people who fall short pay $311 a month with 30 to 39 quarters of coverage, or $565 a month with fewer than 30 quarters. The Part A inpatient hospital deductible in 2026 is $1,736 per benefit period.
Because premium-free Part A costs nothing and can pick up hospital costs your group plan does not cover, the default advice is to enroll at 65. The exception is health savings accounts.
You cannot contribute to an HSA in any month you are enrolled in any part of Medicare, including premium-free Part A. If you want to keep contributing, you have to delay Part A as well as Part B, which means not applying for Medicare and not claiming Social Security retirement benefits (claiming Social Security triggers automatic Part A enrollment).
For 2026, HSA contribution limits are $4,400 for self-only coverage and $8,750 for family coverage, plus a $1,000 catch-up contribution at age 55 and older.
The Six-Month Retroactive Trap
When you apply for Medicare after age 65, Part A can be backdated up to six months, though never earlier than the month you turned 65. Social Security does this automatically. Most people do not ask for it and do not expect it.
If you were contributing to an HSA during those retroactive months, those contributions become excess contributions under IRS rules and are subject to a 6% excise tax for each year they stay in the account. The fix is timing: stop HSA contributions at least six months before you apply for Medicare or claim Social Security.
If you already over-contributed, you generally need to withdraw the excess plus any earnings on it by your tax return due date, including extensions. A tax professional should handle that withdrawal, since the paperwork and the earnings calculation are easy to get wrong.
Note that you can still spend money already in the HSA after enrolling in Medicare, including on Medicare premiums. Only new contributions stop.
The 8-Month Special Enrollment Period
When your job or your group coverage ends, you get an 8-month Special Enrollment Period (SEP) to enroll in Part B without a late penalty. Two details trip people up constantly.
Detail one: the clock starts at whichever comes first, employment ending or coverage ending. It does not start when your COBRA runs out. It does not start when you feel ready. If you retire on March 31 and your employer coverage runs through April 30, the SEP begins May 1 and runs eight months from there.
Detail two: Part B's 8 months and drug coverage's 2 months are different deadlines. The SEP to join a Part D drug plan or a Medicare Advantage plan is only 2 months after coverage ends. People who use the full 8 months for Part B and then shop for drug coverage discover the drug window closed six months earlier.
| Coverage type | Window after employment or group coverage ends | Penalty for missing it |
|---|
| Part B | 8 months | 10% of the standard premium for each full 12 months you could have had Part B, added for life |
| Part D drug coverage | 2 months (63 days without creditable drug coverage) | 1% of the national base beneficiary premium ($38.99 in 2026) per uncovered month, added for life |
| Medicare Advantage | 2 months | You wait for the fall Annual Enrollment Period |
At the 2026 standard premium of $202.90 a month, a single 12-month Part B gap adds roughly $20 a month, permanently, and it grows with the premium every year. Our breakdown of how the Medicare late enrollment penalty is calculated walks through the math on longer gaps.
COBRA, Severance, and Retiree Coverage Do Not Count
This is the single most expensive misunderstanding in Medicare enrollment, and it is expensive for life.
The Part B SEP exists only for coverage based on current employment, yours or your spouse's. These do not qualify:
- COBRA continuation coverage
- Retiree health benefits from a former employer
- Severance-package health coverage
- Individual market or Marketplace plans
- VA health care (it does not create a Part B SEP, though it is real coverage)
Someone retires at 66, elects 18 months of COBRA, and reasonably assumes the Medicare clock starts when COBRA ends. It does not. It started the month after the job ended. By month nine of COBRA, the SEP is gone, and the next chance to enroll is the General Enrollment Period, with a lifetime penalty attached.
If you are on COBRA and eligible for Medicare, enroll in Part B now. Do not wait for COBRA to expire. Also be aware that once you are Medicare eligible, a COBRA plan can legally pay as the secondary payer, so it may already be covering far less than you think.
Retiree coverage carries the same trap with an extra twist. Many retiree plans require you to enroll in Parts A and B and then pay only as a supplement. Read the plan document before you decline anything.
How to Enroll in Part B While Working or After You Stop
You do not use the standard online Medicare application for a work-based Special Enrollment Period. You use two forms.
Step 1. Confirm your employer's size and plan status in writing. HR or the benefits administrator can tell you whether your plan pays primary or secondary to Medicare.
Step 2. Get form CMS-L564, Request for Employment Information, completed by your employer. This is the proof that you had group coverage through current employment. Section B is filled out by the employer. Give HR two weeks, since this form often sits in a queue. If a former employer refuses or has gone out of business, Social Security accepts alternative proof such as pay stubs, W-2s, or insurance cards showing the coverage dates.
Step 3. Complete form CMS-40B, Application for Enrollment in Medicare Part B. In the remarks section, write the date you want coverage to begin.
Step 4. Submit both forms. You can upload them through your Social Security account at ssa.gov, fax them, or mail them to your local Social Security office. Keep a copy and a submission receipt.
Step 5. Pick your start date deliberately. If you enroll while you still have the group coverage or within one month after it ends, you can ask for a Part B start date up to three months later, which lets you line Part B up with the day the employer plan actually stops. Enroll after that window and Part B generally starts the first of the month after you sign up. A one-month gap in coverage between plans is avoidable and worth avoiding.
Step 6. Handle drug coverage in the same two weeks. Confirm whether your employer drug coverage was "creditable," meaning at least as good as standard Medicare drug coverage. Employers are required to send a creditable coverage notice each year. Keep it. If your coverage was creditable, you can enroll in Part D during your SEP without a penalty. If it was not, the penalty clock has been running.
If you are still inside your first enrollment window rather than coming off a job, see our guide to the Medicare Initial Enrollment Period. For non-employment situations that open a Special Enrollment Period, such as moving or losing Medicaid, see Medicare Special Enrollment Period qualifying events.
Should You Delay Part B Even If You Can?
Being allowed to delay is not the same as being right to delay. Run the comparison.
| Factor | Points toward delaying Part B | Points toward enrolling at 65 |
|---|
| Employer size | 20 or more employees | Fewer than 20 |
| Group plan deductible | Low | High-deductible plan with big out-of-pocket exposure |
| HSA | Actively contributing and want to continue | Not contributing |
| Premium cost | Employer pays most of the premium | You pay a large share for family coverage |
| Income | High income triggering IRMAA surcharges on Part B | Standard premium applies |
| Doctors | Group plan network works for you | Your doctors are better covered under Original Medicare |
| Spouse and dependents | They rely on your group plan | You are the only person covered |
Higher earners have an extra reason to look closely. Part B premiums rise above the $202.90 standard through income-related monthly adjustment amounts based on your tax return from two years prior, so a still-working couple with a strong income may pay considerably more for Part B than the headline figure.
The reverse case matters too. If your group plan has a $6,000 deductible and Part B would cost $202.90 a month with a $283 annual deductible, taking Part B as secondary coverage may pay for itself in one hospital admission.
Frequently Asked Questions
Do I have to enroll in Medicare at 65 if I am still working?
No, not if your health coverage comes from your own or your spouse's current employer and that employer has 20 or more employees. You can delay Part B penalty free while you remain actively employed and covered. If the employer has fewer than 20 employees, Medicare becomes the primary payer at 65 and you should enroll in both Part A and Part B.
Does my spouse's employer coverage let me delay Part B?
Yes, as long as it is coverage through your spouse's current employment and that employer has 20 or more employees. The employment has to be active. A spouse's retiree plan or COBRA does not qualify.
What happens to my Part B Special Enrollment Period if I take COBRA?
Nothing good. The 8-month window starts when your employment or group coverage ends, whichever comes first, not when COBRA ends. COBRA does not extend the window. Enroll in Part B during those 8 months even if COBRA is still active.
Can I keep contributing to my HSA after 65 if I am still working?
Yes, if you delay all parts of Medicare, including premium-free Part A, and do not claim Social Security. The moment any part of Medicare starts, HSA contribution eligibility ends. Stop contributions at least six months before you apply, because Part A can be backdated up to six months.
How much is Medicare Part B in 2026?
The standard monthly premium is $202.90 with an annual deductible of $283. Higher-income enrollees pay more through income-related surcharges based on their tax return from two years earlier.
I missed the 8-month window. What now?
You enroll during the General Enrollment Period, January 1 through March 31, with coverage starting the first of the month after you sign up, and you will likely owe the Part B late enrollment penalty of 10% for each full 12 months you went without it. Contact Social Security first. There are limited SEPs for exceptional conditions, including cases where an employer or health plan gave you incorrect information about your enrollment obligations, and those require a written request rather than a standard application.
Do I need Part D if my employer plan covers drugs?
Not while the employer drug coverage is creditable. Your plan must send you a creditable coverage notice each year, usually before October 15. Save every one of those notices. When you eventually enroll in Part D, those notices are what prevent a penalty. If your employer coverage was not creditable and you went more than 63 days without Part D, the penalty accrues at 1% of the national base beneficiary premium ($38.99 in 2026) per uncovered month.
Does Part B enrollment affect my group plan?
It can. Some employer plans reduce benefits or shift you to secondary status once you have Medicare. Federal law bars employers with 20 or more employees from offering incentives to drop the group plan for Medicare, but plan design still varies. Ask your benefits administrator how the plan treats Medicare-enrolled active employees before you sign anything.
