Turning 65 is an important milestone, but reaching Medicare eligibility does not necessarily mean you have to retire. Many people continue working after 65, sometimes for several years, while maintaining health insurance through their employer.
The important question is not simply whether you are still working. The type of health insurance you have, whether it comes from your current employment or a spouse’s current employment, the size of your employer, and whether you contribute to a Health Savings Account can all affect how Medicare works for you.
For Arizona seniors, understanding these rules before turning 65 can help prevent unexpected costs, coverage gaps, and Medicare enrollment problems.
At Smile Insurance Group, we help Arizona seniors understand their Medicare options and make informed decisions as they transition into Medicare—whether they are retiring at 65 or continuing to work.
Do You Have to Enroll in Medicare at 65 If You Are Still Working?
Not necessarily.
If you or your spouse are still working and you have health insurance through that current employment, you may be able to delay Medicare Part B without paying a late enrollment penalty. However, the rules depend on the type of coverage you have and your employment situation.
This is one of the most important distinctions for someone turning 65.
Employer coverage based on current employment can allow you to delay Part B and use a Special Enrollment Period later. By contrast, COBRA, retiree coverage, and individual Marketplace coverage generally don’t count as coverage from current employment for this purpose.
Because individual circumstances differ, we recommend reviewing your situation with your employer’s benefits administrator and a qualified Medicare professional before deciding to delay enrollment.
How Medicare Works When You Continue Working After 65
Medicare has several parts, and you may not necessarily need to make every Medicare decision at exactly the same time.
Medicare Part A
Medicare Part A generally helps cover inpatient hospital care and certain other services.
Many people qualify for premium-free Part A because they or their spouse paid Medicare taxes long enough while working. In 2026, Medicare states that most people pay $0 for Part A because they or their spouse generally worked and paid Medicare taxes for at least 10 years.
Some people who continue working may choose to enroll in Part A while keeping employer health coverage.
However, there is an important consideration for people who contribute to a Health Savings Account (HSA).
Once you have Medicare, you generally can’t contribute to an HSA. Medicare also warns that premium-free Part A can have retroactive coverage when you enroll, which is why people approaching Medicare eligibility should coordinate the timing of their final HSA contributions carefully.
If you have an HSA, don’t assume that enrolling in Part A is automatically the right choice simply because it is premium-free. Discuss the timing with your employer benefits administrator and tax professional.
Medicare Part B and Employer Health Insurance
Part B generally covers medically necessary doctor services, outpatient care, preventive services, and other medical services.
If you are still working after 65 and have health insurance through your or your spouse’s current employment, you may be able to delay Part B.
The key issue is whether your employer group health coverage qualifies under Medicare’s rules.
The size of your employer can also affect which insurance pays first.
According to Medicare, if you are 65 or older and have group health coverage through an employer with 20 or more employees, the employer group health plan generally pays first and Medicare pays second. If the employer has fewer than 20 employees, Medicare generally pays first and the employer plan pays second.
This makes employer size particularly important for Arizona seniors working for small businesses.
Do not assume that simply having employer insurance means you can safely postpone Medicare Part B.
Ask your employer’s benefits administrator how your specific group plan coordinates with Medicare.
What If You Work for a Small Business?
This is an area where people approaching 65 need to be especially careful.
If you work for a company with fewer than 20 employees, Medicare generally pays first when you are 65 or older and covered through that employer’s current employment-based group health plan.
That means failing to enroll in Medicare when required could potentially create coverage and payment problems.
Before your 65th birthday, ask your employer:
- Does our group health plan coordinate with Medicare?
- Does the company have fewer than 20 employees?
- Will our insurance pay first or second once I become Medicare eligible?
- Do I need to enroll in Medicare Part A?
- Do I need to enroll in Medicare Part B?
- Is our prescription coverage considered creditable?
- Will my premiums or benefits change after I become eligible for Medicare?
Getting these answers before your 65th birthday is much better than discovering a problem after a medical claim is denied.
What Is a Medicare Special Enrollment Period for Someone Still Working?
If you delay Part B because you have qualifying employer group health coverage based on current employment, you may qualify for a Special Enrollment Period (SEP) when that employment or coverage ends.
Social Security states that if you or your spouse have qualifying employer group health coverage based on current employment, you can generally enroll in Part B while that coverage is active or during the 8-month period after the employment or group health coverage ends, whichever happens first.
This can be particularly helpful for people who decide to work until 67, 68, 70, or beyond.
However, the timing matters.
If you know your employer coverage is going to end, Medicare recommends reviewing your enrollment timing in advance so you can reduce the risk of a gap in coverage.
What Happens When You Retire After 65?
Suppose you turn 65 while continuing to work and decide to retire at 67.
Your Medicare strategy may change when your employment-based health insurance ends.
When you retire, you may need to enroll in Medicare Part B if you previously delayed it because of qualifying employer coverage.
The good news is that people who qualify for a Special Enrollment Period generally have an opportunity to enroll without the standard Part B late enrollment penalty.
The important thing is not to wait until your employer insurance has already ended before researching your Medicare transition.
Medicare recommends planning ahead when employer coverage is ending.
What If You Have COBRA Instead of Employer Coverage?
COBRA is different from coverage based on current employment.
COBRA can allow eligible employees and family members to temporarily continue employer-sponsored group health coverage after employment or certain other qualifying events.
However, COBRA does not generally give you the same ability to delay Medicare Part B that qualifying coverage through current employment can provide.
Medicare specifically advises people who have COBRA and haven’t enrolled in Medicare to pay attention to their Medicare enrollment timing because COBRA does not extend the limited Medicare enrollment window.
If you are approaching 65 and expect to retire soon, don’t assume that COBRA will let you postpone Medicare.
What If You Have Retiree Health Coverage?
Retiree coverage is also different from active employer coverage.
If your health insurance comes from a former employer or union, Medicare’s rules may require you to enroll in Medicare Part A and Part B to receive the full benefits available through that retiree coverage.
Medicare warns that retiree insurance may not pay medical expenses during periods when you were eligible for Medicare but didn’t enroll.
Before declining Medicare because you have retiree coverage, ask your benefits administrator:
“How does my retiree coverage work with Medicare Parts A and B?”
Also ask whether the prescription coverage is creditable drug coverage.
What About Medicare Prescription Drug Coverage?
Prescription drug coverage deserves special attention when you continue working.
If your employer’s prescription coverage is considered creditable, you may be able to delay enrolling in Medicare Part D without incurring a late enrollment penalty, provided you don’t go without creditable drug coverage for 63 days or more.
Your employer or health plan should tell you whether your prescription coverage is creditable.
Keep those notices.
They may be important later if you decide to enroll in Medicare prescription drug coverage.
Should You Take Medicare or Stay on Your Employer’s Insurance?
There is no universal answer.
For one Arizona senior, remaining on an employer plan may make sense. For another, enrolling in Medicare may provide better coverage or lower overall costs.
When evaluating your options, consider:
- Your employer’s monthly premium
- Medicare Part B premiums
- Deductibles
- Copayments and coinsurance
- Prescription drug coverage
- Doctor and hospital networks
- Whether your preferred doctors accept the coverage
- Your spouse’s insurance needs
- HSA contributions
- Employer contributions toward your health insurance
- Whether you plan to retire soon
- Whether you travel frequently
- Whether you may need Medicare Supplement or Medicare Advantage coverage after retirement
Medicare costs vary based on the type of coverage and services you use, and Medicare notes that supplemental coverage such as Medigap or Medicare Advantage can affect your out-of-pocket exposure.
What Should Arizona Seniors Do Before Turning 65?
A few months before your 65th birthday, start gathering information.
1. Talk to your employer
Ask your benefits administrator exactly how your employer health plan coordinates with Medicare.
2. Determine whether you need Part A and Part B
Don’t make this decision based solely on what a coworker or friend did.
3. Check your prescription coverage
Find out whether your employer’s drug coverage is considered creditable.
4. Consider your HSA
If you contribute to an HSA, understand how Medicare enrollment could affect your ability to make contributions.
5. Review your Medicare enrollment timeline
Your Initial Enrollment Period and any applicable Special Enrollment Period can affect when you should apply.
6. Think about retirement
If you’re planning to retire within the next year or two, consider how your insurance will change when your employer coverage ends.
7. Compare your future Medicare options
When you’re ready to transition from employer coverage, you may have choices involving Original Medicare, Medicare Supplement Insurance, Medicare Advantage, and prescription drug coverage.
Medicare After 65: You Don’t Have to Figure It Out Alone
Continuing to work after 65 can give you more flexibility, but Medicare decisions become more important as you approach retirement.
The right decision depends on your employment status, employer size, current health insurance, prescription coverage, HSA situation, retirement plans, and future healthcare needs.
For Arizona seniors, working with an experienced Medicare insurance professional can make the transition easier to understand.
Talk With Smile Insurance Group About Your Medicare Options
If you’re turning 65 and still working in Arizona, Smile Insurance Group can help you understand your Medicare options before you make a decision.
We can help you review your situation, understand the difference between employer coverage and Medicare, and prepare for the transition when you’re ready to retire or change coverage.
Don’t wait until your employer insurance ends to start asking questions.
Contact Smile Insurance Group for a Medicare plan review and get personalized guidance from experienced Medicare insurance professionals serving Arizona seniors.
Call Smile Insurance Group today or request your free Medicare plan review.
Important: Medicare rules can depend on your specific employment and insurance situation. The information above is educational and should not be considered individualized Medicare, tax, or legal advice. Confirm enrollment requirements with Medicare, Social Security, and your employer’s benefits administrator before making coverage decisions.
Frequently Asked Questions About Working Past 65 and Medicare
Can I keep working after I turn 65 and stay on my employer’s health insurance?
Yes. You can continue working after 65, and in some circumstances you can remain covered by an employer group health plan while delaying certain parts of Medicare. The rules depend on whether the coverage is based on current employment and other factors.
Do I have to enroll in Medicare Part B at 65 if I am still working?
Not always. If you or your spouse are actively working and you have qualifying group health coverage through that current employment, you may be able to delay Part B without a late enrollment penalty.
What happens if I work for a company with fewer than 20 employees?
When you’re 65 or older, Medicare generally pays first when your group health coverage comes through an employer with fewer than 20 employees. This can make Medicare enrollment particularly important. Confirm how your specific plan coordinates with Medicare before making a decision.
Can I enroll in Medicare after 65 without a penalty?
You may be able to avoid a late enrollment penalty if you qualify for a Special Enrollment Period because you had qualifying employer group health coverage based on current employment. Social Security generally provides an 8-month Special Enrollment Period after the employment or group coverage ends.
Does COBRA allow me to delay Medicare Part B?
Generally, no. COBRA is not the same as active employer coverage for Medicare enrollment purposes. Medicare specifically warns that COBRA does not extend the limited time you have to enroll in Part B.
Can I contribute to my HSA after enrolling in Medicare?
Generally, no. Once you have Medicare, you can’t continue making HSA contributions. People approaching Medicare eligibility should carefully coordinate the timing of their final HSA contributions because Part A can have retroactive coverage in certain circumstances.
What happens to my Medicare when I retire after 65?
If you delayed Part B because you had qualifying employer coverage, retiring can trigger a Special Enrollment Period. You should coordinate Medicare enrollment with the date your employer coverage ends to help avoid a gap in coverage.
Can I get Medicare Advantage while I am still working?
Potentially, but you generally need both Part A and Part B to join a Medicare Advantage plan. Whether switching from employer coverage to Medicare Advantage makes sense depends on your circumstances, including your employer plan, providers, prescriptions, and costs.
Should I talk to a Medicare insurance broker before I retire?
Getting information before retirement can help you understand your options and timing. A Medicare insurance professional can explain available Medicare coverage options, while your employer’s benefits administrator can explain how your current group health plan coordinates with Medicare.
When should I start planning for Medicare if I am turning 65 while still working?
It’s best to start researching before your 65th birthday, rather than waiting until retirement. This gives you time to understand your employer coverage, Medicare enrollment requirements, prescription coverage, HSA considerations, and future Medicare options.
Sources for Medicare rules and enrollment:
Medicare.gov — Working Past 65
Social Security — When to Sign Up for Medicare
Medicare.gov — Who Pays First
