Turning 65 while you're still working — what you have to do

The short answer is probably not much, at least right now — but the exceptions are expensive enough that it's worth ten minutes finding out which case you're in.

And the number that decides it is how many employees your company has.

Twenty or more employees

Your group health plan is generally primary here. You can delay Part B without a late penalty until you leave the job or lose the coverage, and you get an eight-month Special Enrollment Period at that point to sign up with no penalty at all.

Most people in this situation take Part A, leave Part B alone, and come back to it when they retire, and that's usually the right call.

Fewer than twenty employees

This is where it flips. Medicare typically becomes primary at 65 whether you're still working or not, and your employer plan pays second. So if you skip Part B here, you can be left holding most of the bill for care your employer plan assumed Medicare had already covered.

This is the case that costs real money, and it's the one people get wrong, because nothing about turning 65 at a small company announces itself.

Part A is a separate decision, with one trap

Part A is premium-free for anyone with forty quarters of Medicare-taxed work, so there's rarely a reason not to take it at 65 — with one exception that catches people every single year.

If you or your spouse contribute to a health savings account, enrolling in any part of Medicare, premium-free Part A included, stops those contributions. And here's the timing that surprises people: if you enroll in Part A after your 65th birthday month rather than at it, Part A can be backdated up to six months. Which means your contributions needed to stop six months before you applied, not on the day you applied.

Sign up right at 65 and Part A only backdates to the first of your birthday month. Wait, and you may have six months of contributions to unwind with your tax preparer.

Creditable coverage, and getting it in writing

"Creditable" means Medicare considers your coverage at least as good as its own, and if yours is creditable, the clock on late-enrollment penalties doesn't start. Your HR department can confirm it, and they should confirm it in writing.

Ask for that letter and then keep it. It's the document that settles an argument years later, and it takes one email to get while you still work there.

Why this isn't a guess-and-check situation

The headcount rule, whether your coverage is creditable, and the HSA timing all interact with each other. Getting one piece wrong means either a permanent premium penalty or a tax problem, and neither one shows up until later.

Tell us your employer size and your coverage type and we'll give you a straight answer in one call. If staying on your employer plan is the better move, we'll say so — even though it means we've signed you up for nothing that day.