Medicare and employer coverage

The 20-employee rule decides everything

The single most important factor in whether you can delay Medicare is how many people your employer has. With 20 or more employees, your active group plan pays primary and Medicare is secondary, so you can put off Part B without a penalty and pick it up later. With fewer than 20 employees, the math flips — Medicare becomes primary, and delaying it leaves you badly exposed.

How coordination works at a large employer

At an employer with 20 or more employees, your active coverage pays first and Medicare pays second if you’ve enrolled. Many people in this situation keep just the group plan and delay Part B, then use a Special Enrollment Period to add it when they retire. That’s a reasonable choice as long as the group coverage is solid — and it’s how working past 65 avoids paying a Part B premium you don’t yet need.

Why small-employer coverage is different

If your employer has fewer than 20 employees, Medicare is primary even if you don’t enroll. That’s the catch: the group plan pays as though Medicare had already covered its share, whether or not you actually signed up — which can leave you responsible for large amounts. At a small employer, the safe move is to enroll in both Part A and Part B at 65 so you’re not underinsured.

Should you take Part A?

Premium-free Part A is usually worth taking at 65 because it adds hospital coverage at no cost. The one real exception is if you contribute to a health savings account: enrolling in Part A ends those contributions, so HSA savers often delay even free Part A until they stop funding the account.