Still Working at 65? Medicare and Employer Coverage Explained

Most people enroll in Medicare when they turn 65. But if you're still working — or your spouse is — you may have options. The key is understanding which types of coverage let you delay, and which do not. COBRA, retiree plans, and marketplace plans are not substitutes for Medicare.

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Still on Your Own Employer Plan

You are actively employed · coverage through your job

Can you delay Medicare?

Yes — you can generally delay Part B (and Part D) without penalty as long as you are actively employed and covered by your employer's group health plan.

The rules

Your employer must have 20 or more employees for Medicare to be the secondary payer
You must be actively employed — not retired, even if still receiving employer benefits
Your group coverage must be through your own current employment or your spouse's current employment
You typically still need to enroll in Part A at 65 — it's premium-free and doesn't hurt to have
If your employer has fewer than 20 employees, Medicare becomes primary and you should enroll

When your coverage ends

You get a Special Enrollment Period (SEP) — 8 months to enroll in Part B after your employer coverage ends or you stop working, whichever comes first
You also get 63 days to enroll in Part D without a penalty after losing creditable drug coverage
Don't wait until COBRA ends — the SEP clock starts when employer coverage ends, not COBRA

Covered Through a Spouse's Employer

Your spouse is still actively employed

Can you delay Medicare?

Yes — if your spouse is actively employed and you are covered under their employer's group health plan, you can delay Medicare Part B without penalty.

The rules

Your spouse must be currently and actively employed — retired spouses with continued benefits do not count
The employer must have 20 or more employees
You are covered as a dependent under their active group plan
Same SEP applies when your spouse's coverage ends — 8 months for Part B, 63 days for Part D

Important timing note

When your spouse retires or loses their job, notify Social Security promptly
Don't wait — the SEP window is strict and exceptions are rare
If your spouse's employer has fewer than 20 employees, Medicare should be your primary coverage

COBRA Coverage

Continuation coverage after leaving a job

Can you delay Medicare?

No — COBRA does NOT let you delay Medicare enrollment. This is one of the most common and costly mistakes people make at 65.

Why COBRA doesn't count

COBRA is continuation coverage — it's not the same as active employer coverage
Medicare considers your employment to have ended when you left the job
Your 8-month SEP window starts when you leave work — not when COBRA ends
If you rely on COBRA past your 8-month SEP window, you will face a late enrollment penalty for Part B — permanently
A separate permanent Part D penalty applies too, based on how long you went without coverage

What to do instead

Enroll in Medicare Part B within 8 months of leaving your job
You can keep COBRA for coverage categories not included in your Medicare plan
Talk to an advisor before your last day of work to plan the transition

Retiree Health Coverage

Former employer continues benefits after retirement

Can you delay Medicare?

Generally no — retiree coverage is not a substitute for Medicare. Most retiree plans are designed to work alongside Medicare, not replace it.

What you need to know

Retiree plans typically become secondary to Medicare once you're eligible
If you delay Medicare, your retiree plan may not pay your claims as primary — leaving you with large bills
Some retiree plans will cancel your coverage entirely if you don't enroll in Medicare when eligible
Check with your former HR department or benefits administrator before making any decision

The exception

Some retiree plans explicitly allow delayed Medicare enrollment and remain primary — but these are rare
Get it in writing from your plan administrator if this applies to you

ACA Marketplace Plan

Individual coverage purchased through Healthcare.gov

Can you delay Medicare?

No — a marketplace plan does not let you delay Medicare enrollment without penalty. Once you're Medicare-eligible, marketplace plans treat you differently.

What happens at 65 on a marketplace plan

You lose eligibility for premium tax credits once you become eligible for Medicare
Keeping a marketplace plan past Medicare eligibility means you're paying full price with no subsidy
A marketplace plan is not employer coverage, so it does not give you a Part B Special Enrollment Period — this is the part that catches people out
For Part D, check the notice: some marketplace drug coverage is creditable and some is not, and only the plan can tell you which
Delay enrolling in Medicare while on a marketplace plan and you can face a permanent Part B late enrollment penalty — marketplace coverage does not protect you the way employer coverage does. A Part D penalty depends on whether that plan's drug coverage was creditable

What to do

Enroll in Medicare during your Initial Enrollment Period (the 7-month window around your 65th birthday)
You can cancel your marketplace plan when Medicare begins — it won't overlap

Quick reference

Can I delay Medicare?

✅ Yes — delay is allowed

Active employer coverage (yours or your spouse's) from an employer with 20+ employees. Part A is still usually worth enrolling — it's premium-free and coordinates with your group plan.

❌ No — enroll when you turn 65

COBRA, retiree coverage, marketplace plans, VA coverage alone, and most individual health plans. Missing your window triggers permanent penalties on both Part B and Part D, based on how long you delayed.

The Part B late enrollment penalty

For every 12-month period you delayed Part B enrollment without qualifying coverage, your Part B premium increases permanently. The longer you delay, the higher the increase — and it compounds with each additional year. This is not a one-time fee.

Not sure if your coverage qualifies?

Bring your coverage details to a PharmSurance advisor and we'll tell you exactly whether you can delay, when your deadline is, and what to do next. At no cost to you.

PharmSurance.com

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 (TTY 1-877-486-2048) to get information on all of your options. If you submit your information on this site, it will be provided to one or more licensed insurance agents, who may call, email, or text you about Medicare Advantage, Medicare Supplement, and Prescription Drug Plan options. This is an educational overview only. Rules described reflect current Medicare policy and may change. Consult Social Security or a licensed advisor for guidance specific to your situation.