If You Delay Medicare While Working, Read This Before You Retire in 2025

Key Takeaways

• If you’re still working past age 65 and have employer coverage, you may be able to delay Medicare without penalty—but only under specific conditions.

• Failing to enroll at the right time after your employment or group coverage ends can result in late enrollment penalties and coverage gaps.

Working Past 65? Here’s What You Need to Know

Many people today choose to keep working past the age of 65. Whether for financial security, health benefits, or personal satisfaction, delaying retirement is increasingly common. But if you’re still employed and thinking about delaying Medicare, it’s critical to understand how Medicare rules apply to you in 2025.

Understanding Medicare’s Basic Enrollment Windows

Before discussing the implications of delaying enrollment, it helps to understand the basic enrollment periods:

• Initial Enrollment Period (IEP): This 7-month window starts 3 months before you turn 65, includes your birth month, and ends 3 months after.

• Special Enrollment Period (SEP): If you’re still working and have qualifying employer coverage, you may delay Medicare Part B without penalty. Once that coverage ends, you get an 8-month SEP to sign up.

• General Enrollment Period (GEP): Runs from January 1 to March 31 each year. If you missed your IEP or SEP, this is your fallback—but late penalties and coverage delays can apply.

Not All Employer Coverage Lets You Delay Without Penalty

The key condition for delaying Medicare without penalties is having creditable coverage from an employer-sponsored group health plan.

• The employer must have 20 or more employees. If the group is smaller, Medicare becomes primary, and delaying Part B can lead to penalties.

• The plan must be considered creditable—meaning it offers at least the same level of coverage as Medicare.

You should confirm with your HR department that your coverage meets these standards.

What Parts of Medicare Can You Delay?

In 2025, most people become eligible for Medicare at age 65. You can generally delay some parts of Medicare if you’re still working:

• Part A (Hospital Insurance): Most people get this premium-free if they worked and paid Medicare taxes for 10+ years. You can enroll in Part A even if you delay Part B.

• Part B (Medical Insurance): This is the part you may delay if you have qualifying employer coverage. It requires a monthly premium, and penalties apply if you delay without meeting the SEP criteria.

• Part D (Prescription Drug Coverage): You can delay if your employer plan offers creditable drug coverage. You’ll need written proof when you eventually enroll.

COBRA, Retiree Coverage, and ACA Plans Are Not the Same

A common mistake is assuming that COBRA or retiree health plans count as active employer coverage. They don’t.

• COBRA coverage allows you to keep your employer plan after leaving your job, but Medicare doesn’t count it as active coverage for delaying Part B.

• Retiree plans often help cover costs after Medicare kicks in but are not a substitute for Part B.

• Marketplace plans (ACA) also do not protect you from Medicare penalties if you delay enrollment.

When Should You Sign Up for Medicare After You Retire?

Once your employment or employer group coverage ends, your Special Enrollment Period begins. In 2025, you have 8 months to enroll in Part B and/or Part D to avoid late enrollment penalties.

This 8-month SEP:

• Starts the month after your employer or coverage ends (whichever happens first)

• Does not get extended if you keep COBRA or other non-creditable coverage

• Does not include guaranteed drug coverage—if you want Part D, you must enroll within 2 months after losing creditable drug coverage

Delaying Medicare Can Lead to Gaps in Coverage

Many retirees misunderstand how Medicare enrollment interacts with their other coverage. If you miss the SEP after stopping work, you may face:

• A late enrollment penalty for Part B—10% added to your premium for every 12 months you delay

• A Part D penalty—1% per month of delay without creditable drug coverage

• Coverage delays—Part B enrollment during the GEP means your coverage doesn’t begin until July 1

What to Do If You Already Delayed Medicare

If you’re currently working and haven’t signed up for Medicare, you’re not alone—but you need to act strategically as retirement approaches.

Here’s what you should do:

1. Ask your HR department for a written statement verifying that your coverage is creditable.

2. Mark your retirement date and plan to enroll in Medicare accordingly.

3. Apply for Medicare Part B as soon as your employer coverage ends, using the SEP.

4. Consider Part D timing carefully—if your current drug coverage is creditable, get proof in writing. If not, enroll in Part D right away.

The Enrollment Process During the SEP

You’ll need two key forms to sign up for Medicare Part B using the SEP:

• CMS-40B: Application for Enrollment in Medicare Part B

• CMS-L564: Request for Employment Information (to verify your employer coverage)

You can submit these forms online, by mail, or at your local Social Security office. Make sure to keep a copy of all documents you submit.

What Happens If You’re Still Working Past Age 65 in 2025

You can choose to:

• Enroll in Medicare Part A only and keep your employer insurance as primary

• Delay Part B if your employer plan meets the criteria

• Decline Part D if your drug coverage is creditable

But you must:

• Reassess your plan before retiring

• Enroll on time to avoid penalties and gaps

• Keep documentation for creditable coverage

Medicare and Health Savings Accounts (HSAs)

If you’re contributing to a Health Savings Account (HSA), be careful:

• Once enrolled in any part of Medicare, you can no longer contribute to an HSA

• To avoid tax penalties, stop HSA contributions at least 6 months before your Medicare Part A enrollment

For example, if you plan to retire in June 2025 and enroll in Medicare Part A, stop HSA contributions by December 2024.

Why It’s Critical to Understand These Rules in 2025

The Medicare rules haven’t changed much, but their consequences are more significant than ever. In 2025, with more people delaying retirement, more are also delaying Medicare—and more are making costly mistakes.

Understanding your rights and obligations:

• Protects you from penalties

• Ensures seamless health coverage

• Gives you peace of mind as you retire

Don’t Assume—Always Double-Check

Even if you think you’re covered, confirm every detail:

• Does your employer have 20+ employees?

• Is your plan creditable?

• Do you have proof in writing?

• Are you timing your enrollment correctly?

Relying on guesswork—or even well-meaning advice from coworkers—can backfire.

Prepare for Retirement with the Right Medicare Strategy

If you plan to retire in 2025 and have delayed Medicare while working, now is the time to act. Every situation is slightly different. That’s why it’s important to:

• Review your current and future coverage

• Understand the exact timing of your SEP

• Consider how Medicare will work with other benefits you may receive

To get help choosing the right path, speak with a licensed agent listed on this website who can walk you through your options step-by-step.