Turning 65 and Still Working: Do You Need Medicare Part B?

Watch the 2½-minute video above, or read on for the full explanation. The complete transcript is at the bottom of this page.

One of the questions I'm hearing more and more often lately goes something like this:

"I'm turning 65, but I'm still working, and I'm on my health care plan through my employer. So I'm fine, right?"

My honest answer is: yes and no. Having health insurance through your job doesn't automatically mean you can skip Medicare Part B when you turn 65. It depends on how your employer's plan works with Medicare. Let me walk you through it.

The short answer: it depends on who pays first

When you have both employer coverage and Medicare, one of them pays your medical bills first (the "primary payer") and the other pays second (the "secondary payer"). Which one is which makes all the difference.

If your employer plan pays first

If your employer's plan is the first payer and Medicare would be the second payer, then you can generally continue with your employer plan, and you don't have to enroll in Part B right away.

If Medicare pays first

If Medicare is the first payer and your employer plan is the second payer, then you should enroll in Part B. That's what CMS (the Centers for Medicare & Medicaid Services, the federal agency that runs Medicare) recommends. When your employer plan is set up to pay after Medicare, skipping Part B can leave you with gaps in your coverage.

When does Medicare usually become the primary payer?

In my experience, this usually comes up in a couple of situations:

• You work for a smaller company. Under Medicare's rules, if your employer has fewer than 20 employees, Medicare generally pays first.
• Your company has a corporate parent that's out of state. For example, your division or team is here in California, and your health plan is set up through the local team rather than through the corporate parent. Situations like this can change how your plan works with Medicare, so they're worth asking about.

Don't assume. Ask your plan administrator

Here's the bottom line: just because you have employer health care does not mean you can stay on it, or should stay on it, when you turn 65.

Before you decide to skip Part B, talk to your plan administrator (or whoever handles your company's health benefits, often HR) and ask how the plan works once you turn 65. A couple of good questions to ask:

• Once I turn 65, does this plan pay first, or does Medicare pay first?
• Do I need to enroll in Medicare Part B to keep my coverage working the way it does today?

Get the answer before your 65th birthday, not after.

Why this matters: Part B late enrollment penalties

This is something that's very important. If you don't enroll in Part B when you should have, there can be penalties. The Part B late enrollment penalty adds 10% to your monthly Part B premium for each full 12-month period you should have had Part B but didn't, and it generally lasts for as long as you have Part B.

Here's the kind of situation I want to help people avoid:

Let's say you're 65, you plan to work until 70, and you think your employer's plan has you covered, so you figure you're fine. Then you turn 70 and find out, oops, that wasn't the case. Now you have quite a few penalties. At that point it can get very complicated, and it may not even make sense for you to enroll in Medicare. That could leave you paying out of pocket for your health care expenses as you're getting older. You don't want that. It's a headache.

The good news: if your employer coverage really is primary because you're still actively working, you'll generally have a Special Enrollment Period to sign up for Part B later without a penalty, usually within 8 months after the job or that coverage ends. The key is knowing which situation you're in. (For more on how the penalty works, see our guide to the Part B late enrollment penalty. If you're covered through your spouse's job, see Can I stay on my spouse's insurance instead of taking Medicare?)

In some cases, staying on your employer plan may not make sense

I'm getting this question more frequently now. We're running into situations where, in certain cases, it may not make sense to stay on the employer health plan at all.

If you're wondering how the costs compare between the plan you have through your employer and what a Medicare plan would look like for you, we can help you look at that too.

Heading into fall: a good time to double-check

As we head into October, this is a good time to keep all of this in mind. Medicare's Annual Enrollment Period runs from October 15 through December 7, and this is the time of year when a lot of Medicare conversations happen. If you're turning 65 and still working, or you're getting close, use this season as a reminder to confirm where you stand with your employer plan and Part B.

We'll be sharing short tips like this every week through the end of the year to answer common questions and bring up points worth knowing.

Quick FAQ

Have questions? Give us a call. We're here to help.

If you're turning 65 and still working, or you're just not sure whether your employer plan pays first, let's talk it through. There's no cost and no obligation.

• Call: (818) 749-2131
• Email: info@garboinsurance.com
• Book a free consultation: garboinsurance.com/contact

Garbo Insurance is based in Van Nuys and helps Medicare beneficiaries across the San Fernando Valley, Los Angeles County, and throughout California by phone and video.

Garbo Insurance is an independent insurance agency and is not connected with or endorsed by the U.S. government or the federal Medicare program. This article is general education, not a recommendation for your specific situation.