💼 Still Going Strong: When Can You Delay Medicare Part B Without Penalty?

An Essential Guide for the Working Senior

Turning 65 is a landmark event, often synonymous with retirement and Medicare enrollment. But what if the retirement chapter is still a few years off, and you're still happily contributing to the workforce? This common scenario creates one of the most confusing Medicare decisions: Should I enroll in Medicare Part B now, or can I delay it without incurring a penalty?

The decision to delay can save you hundreds in monthly premiums, but getting it wrong can result in permanent, higher costs. This guide will walk you through the rules, the critical differences between Part A and Part B, and even address what happens if you go back to work after you’ve already enrolled.

The Two Golden Rules of Working Past 65

For most people still working at 65, the decision boils down to the rules surrounding Medicare Part A (Hospital Insurance) and Medicare Part B (Medical Insurance).

1. Medicare Part A (The "Free" Part)

For most Americans who have worked and paid Medicare taxes for at least 10 years (40 quarters), Part A is premium-free.

• The Rule: You can, and usually should, sign up for premium-free Part A when you turn 65, even if you keep your employer coverage. It acts as secondary coverage and costs you nothing.

• The Exception (The HSA Dilemma): If you are actively contributing to a Health Savings Account (HSA), you must not enroll in Part A. Enrollment in any part of Medicare disqualifies you from making contributions to an HSA. In this case, you must formally delay Part A to continue funding your HSA.

  
  

2. Medicare Part B (The Premium Part)

Part B covers doctor visits, outpatient care, and preventive services, and it requires a monthly premium (which may be higher based on your income via IRMAA). This is the part most people look to delay.

• The Rule: You can delay Part B without penalty only if you have credible coverage based on current employment—either your own or your spouse’s—from an employer with 20 or more employees.

If your employer has fewer than 20 employees, Medicare usually becomes your primary insurer at age 65, meaning you generally must enroll in Part B to avoid costly gaps in coverage and potential penalties. For more information on part A and B, join one of our Medicare meetings hosted by a licensed agent.

Understanding the Special Enrollment Period (SEP)

If you do qualify to delay Part B (because you are covered by a large employer plan), you get a unique second chance to enroll later without penalty: the Special Enrollment Period (SEP).

The SEP for Part B is your protected 8-month window that begins after one of two things happens, whichever comes first:

1. Your employment (or your spouse's employment) ends.

2. Your group health plan coverage based on that employment ends.

Crucial Warning: This 8-month window does not include coverage like COBRA, retiree health insurance, or coverage purchased on the Health Insurance Marketplace. If you enroll in COBRA after leaving your job, your 8-month SEP starts when you stop working, not when COBRA ends.

Action Item: To use this SEP, you will need documentation from your employer to prove you had current employment coverage (Form CMS-L564, "Request for Employment Information").

🔄 What If I Already Enrolled, but Now I’m Going Back to Work?

This is a less common but a frequently asked and critically important scenario, often arising when a retired senior takes a new job with excellent benefits, particularly one tied to an HSA.

If you are already enrolled in Medicare Part B and return to work with coverage from an employer with 20 or more employees, you can voluntarily terminate (unenroll from) your Part B coverage.

How to Unenroll from Part B:

1. Confirm Credible Coverage: You must confirm your new employer’s coverage qualifies as credible and will be primary. Do not cancel Part B before this new coverage is active!

2. Contact Social Security: You must formally request termination of Part B using Form CMS-1763.

3. Interview and Notice: Social Security (SSA) typically requires a personal interview (in person or by phone) to ensure you understand the risks of dropping coverage, including the potential for a late enrollment penalty if you don't secure another SEP later.

4. Future Re-Enrollment: When you eventually retire from this new job, you will use the same 8-month Special Enrollment Period described above to re-enroll in Part B without penalty.

Key Takeaway: While you can unenroll, it requires a formal process through SSA and is generally only done to save on premiums or, more commonly, to regain eligibility to contribute to an HSA.

The Part D Pitfall (Prescription Drugs)

While focusing on Part B, don't forget Medicare Part D (Prescription Drug Coverage).

If you delay Part B, you can also delay Part D without penalty only if your current employer coverage includes creditable drug coverage—meaning the coverage is expected to pay, on average, at least as much as standard Medicare Part D coverage.

Your employer is required to send you a notice each year confirming whether their drug coverage is "creditable." Keep this document! If you lack creditable drug coverage, you must enroll in a Part D plan during your Initial Enrollment Period to avoid the Part D late enrollment penalty, which is permanent.

🎯 Our Final Recommendation

The rules surrounding Medicare enrollment while working are complex because they intersect with employment size, the type of coverage, and your personal financial goals.

Before you make any decision to delay or unenroll:

1. Talk to your HR/Benefits Administrator: Get written confirmation on the size of your employer and whether their plan will pay primary or secondary once you turn 65.

2. Speak with an agent: Our licensed specialists deal with these scenarios every day. We can review your specific situation, your employer's documentation, and your coverage goals to ensure you enroll at the right time—without penalties or gaps in coverage.

   
   

Don't risk a lifetime penalty. Let us help you navigate your working years and retirement with confidence. Schedule your appointment today. getMcare is always here to help.