This is the area where confident, wrong advice does the most damage, because the penalty it creates is permanent and only shows up years later. The rules are not complicated, but they turn on details people do not think to check: how many employees the firm has, whether the coverage is a current employer’s, and whether anyone is funding a Health Savings Account.
What actually protects you
The protection comes from group health coverage through a current employer — yours or your spouse’s — where the plan is available to everyone at the company. If that describes your situation, you can generally wait to take Part B until the work or the coverage ends, and no penalty accrues in the meantime.
Firm size matters. The usual threshold is 20 or more employees for someone eligible through age; it is 100 or more where eligibility comes from a disability. Below the threshold, Medicare generally pays first and the employer plan second, which means not taking Part B can leave you with bills the employer plan will not cover.
What does not protect you
Several things feel like employer coverage and are not, for this purpose.
- Retiree coverage. It is not current-employer coverage. It may also refuse to pay unless you have both Part A and Part B.
- COBRA. Continuation coverage does not count, and crucially it does not pause the eight-month clock either.
- A Marketplace plan. Not employer coverage.
- Coverage not offered to everyone at the company, or self-employment coverage. Medicare.gov is explicit that you should ask whether yours is employer group health plan coverage as the IRS defines it, and sign up at 65 if it is not.
The eight-month clock
When you or your spouse stop working, or lose the job-based coverage if that comes first, an eight-month Special Enrollment Period opens for Part B. It starts at that moment, not when COBRA runs out and not when you decide to look at it.
This is the single most common way a permanent penalty gets created: someone leaves work, takes 18 months of COBRA, and discovers at the end of it that the Part B window closed ten months earlier.
The Health Savings Account trap
If you are contributing to a Health Savings Account, Part A changes things. You cannot contribute to an HSA once you have Medicare, and Part A can be backdated when you enroll after 65, which can make contributions already made in that period excess contributions.
The practical move is to stop HSA contributions well before you enroll, and to work the dates out before filing rather than after. Your employer’s benefits administrator and your tax preparer should both see the dates.
Do not forget Part D
The Part B question gets all the attention, but Part D has its own penalty — 1 percent a month, permanently — and its own test. Employer drug coverage is usually creditable, and the plan must tell you in writing each year whether it is. Keep that notice. It is what you produce if a penalty is ever assessed in error. See late enrollment penalties.
Frequently asked questions
Can I keep my employer plan and skip Medicare entirely?
If the plan is through a current employer with 20 or more employees, you can generally delay Part B without penalty. Most people still take Part A because it costs nothing — unless they are funding a Health Savings Account, in which case Part A ends contributions.
Does COBRA count as employer coverage for Medicare?
No. COBRA is not current-employer coverage and it does not delay the eight-month Special Enrollment Period, which starts when the employment or the job-based coverage ends. This is the most common cause of an avoidable Part B penalty.
My employer has 12 employees. Does that change anything?
Yes, significantly. Below 20 employees Medicare generally pays first and the group plan second, so delaying Part B can leave you exposed to bills the employer plan will not pay. Ask the benefits administrator in writing how the plan coordinates with Medicare.
Can I contribute to my HSA after enrolling in Medicare?
No. HSA contributions must stop once you have Medicare, and because Part A can be backdated when you enroll after 65, contributions made in the backdated months can become excess contributions. Work out the dates before you enroll.
Sources
- Working past 65 — Medicare.gov · read 2026-10-19
- When can I sign up for Medicare? — Medicare.gov · read 2026-10-19
- Avoid late enrollment penalties — Medicare.gov · read 2026-10-19
This guide explains published rules and figures, with the source for each one. It is not advice about your own situation.