In short
- With 20 or more employees, your group plan pays first and Medicare pays second, so delaying Part B is often safe.
- With fewer than 20 employees, Medicare pays first. Skipping Part B can leave you with big unpaid bills.
- COBRA, retiree coverage, VA coverage and Marketplace plans do not count as current employment coverage.
- After the job or coverage ends, you have 8 months for Part B but only 2 full months to join a Part D or Medicare Advantage plan.
- Prove your employer coverage with Form CMS-L564, sent with Form CMS-40B to Social Security.
Plenty of people in Lincoln and across Nebraska work past 65, and many assume their job's health plan means they can ignore Medicare. Sometimes that is true. The deciding factor is mostly how many people your employer has: at 20 or more employees, your group plan pays first and you can usually delay Part B without a penalty. Under 20, Medicare pays first, and skipping Part B can be expensive.
Can you delay Medicare if you are still working?
Yes, you can delay Part B without a penalty if you have group health coverage based on current employment, yours or your spouse's, and the employer is large enough that the group plan pays first. When that job or coverage ends, you get an 8-month Special Enrollment Period to sign up.
If you are not collecting Social Security, nothing happens automatically at 65. You decide whether to sign up for Part A, Part B, both or neither. If you are already collecting Social Security, you are enrolled in Part A and Part B automatically, and you would need to tell Social Security before your card's start date if you want to delay Part B.
How does the 20-employee rule work?
The rule decides which insurance pays first, called the primary payer. The primary payer pays up to its limits. The secondary payer only picks up costs the primary did not cover, and it might not pay all of them.
| Your situation | Who pays first |
|---|---|
| 65+, current employer coverage, employer has 20 or more employees | Group plan pays first, Medicare second |
| 65+, current employer coverage, fewer than 20 employees | Medicare pays first, group plan second |
| 65+, fewer than 20 employees but part of a multi-employer plan where at least one employer has 20+ | Group plan pays first |
| Under 65 with a disability, employer has 100 or more employees | Group plan pays first |
| Under 65 with a disability, fewer than 100 employees | Medicare pays first |
| ESRD with group coverage | Group plan pays first for the first 30 months of Medicare eligibility |
| Retiree coverage or COBRA | Medicare pays first |
Source: Medicare & You 2027 and Medicare.gov's coordination of benefits page.
What doesn't count as employer coverage?
Only coverage tied to someone actively working counts. Medicare & You 2027 lists these as not current employment coverage:
- COBRA, or similar continuation coverage after the job ends
- Retiree health coverage
- VA coverage
- Individual coverage, including Health Insurance Marketplace plans
- Former-employer coverage you get through severance or a layoff
If any of these is your only coverage, sign up for Part B during your Initial Enrollment Period. Our comparisons of COBRA vs Medicare and employer coverage vs Medicare go deeper.
Should you take Part A while you are still working?
Often yes. Part A usually has no premium, and it can pay as secondary coverage for a hospital stay. There is no penalty for delaying Part A with no premium, but there is also little reason to wait, unless you or your employer contribute to a Health Savings Account (HSA).
Once you have any part of Medicare, your HSA contribution limit drops to zero. Part A can also be backdated up to 6 months when you apply, which can turn recent contributions into excess contributions. If you have an HSA, read HSAs and Medicare before you apply for anything.
One more rule: if you are already collecting Social Security retirement benefits, you cannot turn down Part A. Social Security's policy is that the only way out is to withdraw your benefit application and repay everything you have received.
What about drug coverage while you work?
If your employer plan's drug coverage is creditable, meaning it is expected to pay on average at least as much as standard Part D, you can skip Part D without a penalty. Your employer or plan must tell you each year whether it is creditable. Keep those notices; your future Part D plan may ask for proof.
When the coverage ends, you have 2 full months after the month it ends to join a Part D or Medicare Advantage plan. That is much shorter than the 8-month Part B window, and it is the deadline people miss most.
How do you sign up for Medicare when you retire?
Use the Part B Special Enrollment Period. You can sign up any time while you still have the employer coverage, or during the 8 months after the job or coverage ends, whichever comes first. You will need two forms:
- CMS-40B, Application for Enrollment in Medicare Part B
- CMS-L564, Request for Employment Information, with Section B completed by your employer
Mail or fax both to your local Social Security office. If you sign up while still covered, or in the first full month after coverage ends, you can ask to delay your Part B start date up to 3 months.
Example timeline. Linda is 67 and works for a Lincoln employer with about 200 employees. Her last day, and the last day of her group coverage, is June 30, 2027.
| When | What she does |
|---|---|
| April 2027 | Asks HR to complete Form CMS-L564 and confirms her coverage end date |
| May 2027 | Sends CMS-40B and CMS-L564 to Social Security, asking for Part B to start July 1 |
| July 1, 2027 | Part B starts; her 6-month Medigap Open Enrollment Period begins |
| By August 31, 2027 | Deadline to join a Part D or Medicare Advantage plan (2 full months after June) |
| By February 29, 2028 | Last day of her 8-month Part B window, if she had waited |
| December 31, 2027 | Her Medigap Open Enrollment Period ends |
The turning 65 checklist and our guide to Special Enrollment Periods cover the paperwork in more detail.
Why do people keep working past 65?
For many, it is the health plan as much as the paycheck, especially when prescriptions are expensive. Retiring before 65 means bridging the gap with COBRA or a Marketplace plan; see health insurance if you retire before 65.
Your salary also affects Medicare later. IRMAA uses your income from two years earlier, so a high final working year can raise your premiums after you retire. You can appeal with Form SSA-44 after a work stoppage; see IRMAA.
Where can you get help with the decision?
Ask your employer's benefits office how its plan coordinates with Medicare, and get the answer in writing. For official answers, call 1-800-MEDICARE (1-800-633-4227), available 24 hours a day, 7 days a week (TTY 1-877-486-2048), or Social Security at 1-800-772-1213. Nebraska SHIP (1-800-234-7119) offers unbiased counseling. If you want someone to line up your retirement date, Part B start, drug plan and Medigap window, talk to Bill.
Frequently asked questions
It depends on the employer's size. If the employer has 20 or more employees, the group plan pays first and you can usually delay Part B without a penalty. If it has fewer than 20 employees, Medicare is the primary payer, and the employer plan may pay little or nothing for services Part B would cover. Ask your benefits administrator in writing how the plan works with Medicare.
Yes, if it is based on your spouse's current employment and the employer has 20 or more employees. You can delay Part B while covered and use the 8-month Special Enrollment Period after your spouse stops working or the coverage ends. If your spouse retires and you both move to retiree coverage or COBRA, the clock starts at retirement.
Many people do, because Part A usually has no premium and can act as secondary coverage for hospital stays. The big exception is a Health Savings Account: once Part A starts, you can no longer contribute, and Part A can be backdated up to 6 months when you apply. If you already collect Social Security, you are enrolled in Part A and cannot decline it.
You can have COBRA, but it does not protect you from Medicare deadlines. COBRA is not coverage from current employment, so your 8-month Part B window starts when the job ends, not when COBRA ends. Once you are 65 and eligible for Medicare, Medicare pays first and COBRA may pay only a small part of your bills. Most people should sign up for Part B when employment ends.
Start about 2 to 3 months before your last day. If you sign up while still covered by your employer plan, or in the first full month after it ends, you can ask Social Security to delay your Part B start up to 3 months so it lines up with your retirement date. Have your employer complete Form CMS-L564 before you leave.
Not while you keep it, as long as it is creditable, meaning expected to pay at least as much as standard Part D. Your employer must tell you each year whether its drug coverage is creditable, so keep that notice. When the coverage ends, join a Part D or Medicare Advantage plan within 2 full months to avoid a late penalty.
Sources
- Medicare.gov: Who pays first (coordination of benefits) (opens in a new tab)
- Medicare.gov: Working past 65 (opens in a new tab)
- Medicare & You 2027 handbook (CMS Product 10050), pages 17 to 22 (opens in a new tab)
- CMS Form CMS-L564: Medicare Request for Employment Information (opens in a new tab)
- SSA POMS HI 00801.002: Waiver of Part A entitlement (opens in a new tab)
- Medicare.gov: Understanding Medicare Advantage and drug plan enrollment periods (11219) (opens in a new tab)
We do not offer every plan available in your area. Any information we provide is limited to those plans we do offer in your area. Please contact Medicare.gov or 1-800-MEDICARE to get information on all of your options. 1-800-MEDICARE (1-800-633-4227) is available 24 hours a day, 7 days a week. TTY users can call 1-877-486-2048.
