What Happens When You Work Past 65 and Defer Medicare Part B?

If you’re approaching 65 and still working, you might be wondering: Do I need to sign up for Medicare right away, or can I wait? For many, the decision to keep working past 65 comes with a unique set of considerations—especially when it comes to Medicare Part B, which covers outpatient services like doctor visits and preventive care. At TrustInsure, we’re here to break it down for you so you can make the best choice for your health and finances.

Medicare at 65: The Basics

When you turn 65, you become eligible for Medicare. Part A (hospital insurance) is usually free if you’ve worked long enough to qualify, so most people enroll in it right away. Part B, however, comes with a monthly premium—$185 in 2025 for most people—and covers things like doctor appointments and lab tests. If you’re still working and have health insurance through your job, you might not need Part B yet. The good news? You can defer it without penalty—if you play your cards right.

Why Defer Part B?

If you’re working past 65 and have credible health coverage through your employer (or your spouse’s employer), you might not need Medicare Part B just yet. “Credible coverage” typically means a group health plan from an employer with 20 or more employees. Why defer? Here are a few reasons:

Save on Premiums: Why pay $185 a month for Part B if your employer plan already covers your outpatient needs?

Avoid Overlap: If your job’s insurance is solid, adding Part B might just duplicate coverage you don’t need.

Flexibility: You can sign up for Part B later when you retire, without facing a penalty—as long as you follow the rules.

How to Defer Part B Without a Hitch

Deferring Part B isn’t automatic—you need to take a few steps to avoid surprises. When you turn 65, you’ll get a Medicare Initial Enrollment Period (IEP), a 7-month window that starts 3 months before your birthday month and ends 3 months after. If you’re still working and don’t need Part B, here’s what to do:

Enroll in Part A: It’s usually free, and it can act as a backup to your employer plan for hospital stays.

Skip Part B for Now: Don’t sign up during your IEP if you have credible coverage. Medicare will send you a card—just return the Part B portion if you’re declining it.

Get Proof of Coverage: When you eventually retire, you’ll need documentation (like Form CMS-L564) from your employer showing you had credible coverage. This protects you from late enrollment penalties.

What Happens When You Retire?

Once you stop working—or lose that employer coverage—you’ll get a Special Enrollment Period (SEP) to sign up for Part B. This SEP lasts 8 months from the date your job or coverage ends (whichever comes first). Sign up during this window, and you’ll avoid the dreaded late enrollment penalty—a 10% premium increase for each year you could’ve had Part B but didn’t. Plus, your Part B coverage will start smoothly, often the month after you enroll.

A Word of Caution: Small Employers

If your employer has fewer than 20 employees, Medicare rules flip. In this case, Medicare becomes your primary insurance at 65, and your job’s plan is secondary. That means you should enroll in Part B during your IEP—or risk gaps in coverage and penalties later. Double-check with your HR department or give us a call at TrustInsure if you’re unsure about your situation.

Pros and Cons of Deferring

Here’s a quick rundown:

Pros: Lower costs while working, flexibility to enroll later, no penalties with credible coverage.

Cons: Requires careful timing, paperwork, and coordination when you retire. Miss the SEP, and you’re stuck with penalties and delayed coverage.

TrustInsure’s Takeaway

Working past 65 can be a smart move for your career and finances, and deferring Medicare Part B can make sense if your employer plan has you covered. The key is knowing your coverage, your employer’s size, and the enrollment rules. At TrustInsure, we’ve helped countless clients navigate these decisions with confidence. Whether you’re weighing your options now or planning for retirement down the road, we’re here to guide you every step of the way.

Ready to talk Medicare? Contact TrustInsure today—we’ll help you find the plan that fits your life, no guesswork required.