The rule that decides whether you can wait
You can safely delay Part B only if your coverage is a group health plan based on your own or your spouse’s current employment, as Medicare defines it. If it is, you can often wait without a Part B late enrollment penalty and use an 8-month Special Enrollment Period (SEP) when employment or that coverage ends, whichever happens first. If the coverage is COBRA, retiree insurance, Marketplace coverage, or a stipend plan that is not a group health plan, waiting can create a permanent premium penalty and a coverage gap.
The mistake I see most often is treating any job-related insurance as permission to skip Part B. Medicare draws the line at current employment, and a former job does not count.
Premium-free Part A vs Part B timing
If you do not have to pay a premium for Part A, Medicare.gov says you can sign up at 65 or any time after. Most people qualify for premium-free Part A through their own or a spouse’s work history (generally 40 quarters). If you have to buy Part A, CMS puts the 2026 premium at $311 a month with 30 to 39 quarters of work, or $565 with fewer than 30.
Part B is the one almost everyone pays for. The 2026 standard Part B premium is $202.90. Late enrollment generally adds 10% for each full 12-month period you could have had Part B but did not, usually for as long as you keep Part B. The working-past-65 exception exists to avoid that penalty when group coverage based on current work continues.
What “current employment” means
CMS and Social Security describe it the same way. Both of these have to be true:
- You (or your spouse) are still working, and
- You have coverage under an employer or union group health plan based on that current employment.
While that is true, you may enroll in Part B anytime without the late penalty. After employment ends or the group coverage based on that employment ends (whichever is first), you get up to 8 months to sign up. According to Medicare.gov, the 8 months start when you stop working or lose the insurance, even if you pick up COBRA or some other non-Medicare coverage.
COBRA and retiree health plans are not coverage based on current employment. CMS and Medicare.gov both say you are not eligible for this SEP when that coverage ends. Marketplace coverage and many stipend arrangements likewise do not create this SEP. Ask whether the plan is employer group health plan coverage as the IRS defines it. If it is not, sign up for Medicare when you first become eligible.
Employer size and who pays first
Even when you qualify to delay Part B, the employer’s size affects whether delaying is practical.
Under Medicare’s coordination rules, if you are 65 or older and have group coverage based on current employment, and the employer has 20 or more employees (or is in a multi-employer plan where at least one employer has 20 or more), the group plan usually pays first and Medicare pays second. If the employer has fewer than 20 employees, Medicare usually pays first. Small-employer plans may pay little or nothing if you do not have Part A and Part B. Ask the benefits administrator in writing before you skip Part B at a small firm.
Disability-based Medicare uses a 100-employee large-group threshold when coverage is based on a family member’s work. ESRD has separate coordination rules. Those paths are outside this article’s main age-65 worker focus.
How the 8-month SEP works in practice
Here is how Medicare.gov and its enrollment booklet describe the timing:
- You can sign up anytime while covered by the group plan based on current work, or during the 8 months after employment or that coverage ends, whichever ends first.
- Coverage generally begins the month after Social Security gets your completed request.
- If you sign up while still working, or within the first full month after employer coverage ends, you can ask to delay the Part B start date up to 3 months.
- This SEP does not apply if you are eligible based on ESRD, or if you are still inside your Initial Enrollment Period.
- Getting COBRA does not pause or restart the 8-month clock.
Forms typically include CMS-40B (Application for Enrollment in Part B) and CMS-L564 / CMS-L564A (Request for Employment Information) when you already have Part A. Sign up through SSA online or your local Social Security office. Railroad Retirement Board handles RRB annuitants.
Miss the 8 months and you usually wait for the General Enrollment Period (January 1 through March 31), with coverage starting the month after you sign up, and you may owe the Part B late penalty for as long as you have Part B.
COBRA and retiree coverage traps
If you have not signed up for Medicare yet, Medicare.gov’s COBRA guidance says:
- Sign up for Medicare when you turn 65 to avoid gaps and a monthly Part B late penalty.
- COBRA will probably end once you sign up.
- Do not wait until COBRA ends to sign up for Part B. COBRA does not extend your limited time to sign up for Medicare.
If you already have Medicare and then take COBRA, COBRA generally pays after Medicare (with an ESRD exception noted on Medicare.gov).
Retiree coverage from a former employer is also not current employment. It may not pay during periods when you were eligible for Medicare but did not enroll. Ask whether you need both Part A and Part B for full retiree benefits, and whether joining a non-employer Advantage or drug plan will cancel coverage for you or dependents.
Drugs, creditable coverage, and HSAs
Drug coverage runs on its own track. As long as you have creditable drug coverage, you can wait to join a Part D plan or an Advantage plan with drugs. Your plan must tell you whether coverage is creditable and usually sends that notice yearly. Keep that notice. You avoid the Part D late enrollment penalty if you do not go more than 63 days without creditable drug coverage.
If you have an HSA, Medicare.gov advises that you and your employer should stop HSA contributions 6 months before you retire or apply for Social Security (or RRB) benefits, to avoid a tax penalty. Confirm timing with your benefits office and tax advisor. Enrolling in Medicare Part A can affect HSA eligibility even when Part B is delayed.
Before you enroll or delay
- Ask HR whether coverage is based on current employment and how many employees the employer has for Medicare secondary-payer rules.
- Ask whether you need Part A, Part B, or both for the plan to pay correctly at 65.
- Ask whether drug coverage is creditable; keep the written notice.
- If coverage will end, sign up for Part B about a month before the end date so Social Security can process forms without a gap.
- After A and B start, choose Original Medicare (with or without Medigap and Part D) or Medicare Advantage. Check whether retiree coverage survives that choice.
- If anything is unclear, call 1-800-MEDICARE or get free one-on-one help from your State Health Insurance Assistance Program (SHIP) at shiphelp.org.
