Key takeaways:
You can have both employer-sponsored insurance and Medicare. As long as you have creditable coverage through your job, you will not be penalized if you don't enroll in Medicare when you turn 65.
When you have both Medicare and employer-based health insurance, your plans coordinate benefits to determine which one pays first and second.
Enrolling in Medicare could be a good option if your current employer coverage doesn’t meet your needs or if you think secondary coverage would be helpful.
Instead of retiring at age 65, people are increasingly staying in the workforce. According to the U.S. Bureau of Labor Statistics, about 1 in 10 Americans over age 65 will still be working in 2030.
If you’re about to turn 65 and are still in the workforce, you can have both employer-sponsored insurance and Medicare, but there are a few points to consider.
Can you sign up for Medicare if you’re still working?
Yes, when you turn 65, you can sign up for Medicare even if you’re still working and have health insurance through your employer.
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Medicare is the federal health insurance program that covers people age 65 and older, as well as some younger people with disabilities or specific health conditions. Generally, it’s recommended to sign up for Medicare during your initial enrollment period, which is the 7-month window around your 65th birthday. There are stiff penalties if you delay enrolling and don’t meet certain criteria.
How does Medicare work with your employer insurance?
Medicare and employer-sponsored insurance can work together to give you comprehensive health coverage. The health plans coordinate their benefits to determine which are the primary and secondary payers. The primary payer covers its share of your medical bill first. Any unpaid amount goes to the secondary payer.
Here’s how Medicare works with your employer insurance:
If your employer has 20 or more employees: Your employer’s health plan is the primary payer, and Medicare is the secondary.
If your employer has fewer than 20 employees: Medicare typically becomes the primary payer, and your work insurance is the secondary. But different rules may apply if your employer is part of a multi-employer group plan, where small employers join together to offer health insurance as one large group.
If you’re covered under a spouse’s workplace that has 20 or more employees: The work insurance pays first, and Medicare pays second. The same applies if your spouse’s workplace has fewer than 20 employees but is part of a multi-employer group plan.
If you have a group or retiree health plan and qualify for Medicare due to end-stage renal disease (ESRD): Your work insurance pays first for up to 30 months (known as the coordination period). After that, Medicare becomes the primary payer, and your work insurance pays second. The same rule applies if you have COBRA.
If you have both Medicare and employer-based insurance, it’s important to understand which insurer is the primary and which is the secondary. Call the Center for Medicare & Medicaid Services’ Benefits Coordination & Recovery Center at 1-855-798-2627 (TTY: 1-855-797-2627) or check with your policies to find out more.
Is Medicare enrollment required for people who are still working?
It depends. Medicare enrollment isn’t required when you turn 65 if you have health insurance through your employer (or your spouse’s employer). But if your employer has fewer than 20 employees or you don’t have health insurance through work, you should sign up for Medicare (including Part D) as soon as your initial enrollment period rolls around to avoid a late-enrollment penalty.
When you become Medicare-eligible while you’re still working and have insurance coverage, you have three choices:
Enroll in Medicare while keeping your employer-sponsored insurance to give you additional coverage.
Drop your work insurance and switch to Medicare.
Keep your work insurance and delay joining Medicare until you retire.
Medicare eligibility usually starts at age 65, but disability and certain health conditions can qualify you earlier. Find out if you’re eligible for Medicare.
Can you have a health savings account (HSA) and a Medicare plan? Learn how enrolling in Medicare affects your HSA.
Medicare costs: Here’s how much Medicare may cost for you.
If you have comprehensive health insurance through your work or your spouse’s work, you can delay Medicare enrollment until you no longer have job-based coverage. Or you may choose to join premium-free Medicare Part A, in addition to your employer insurance plan, and defer enrollment in Medicare Part B since it comes with a premium.
As soon as you retire or lose employer coverage, you’ll enter Medicare’s 8-month special enrollment period. This period begins the month after your employment or employer-sponsored health coverage ends, whichever comes first. A special enrollment period is when you can sign up for Medicare or make changes to your coverage, such as adding Parts B and D, without paying a late-enrollment penalty.
What are the benefits of getting Medicare while I am working?
If you’re still working and have health insurance through your job, you may choose to enroll in Medicare for extra coverage. Here are a few possible advantages:
Getting extra coverage and lower costs: When your employer plan is the primary payer, Medicare may help pay some of the remaining costs, such as deductibles or copays.
Enjoying access to more healthcare professionals and hospitals: Some workplace plans have smaller provider networks. Having Medicare may give you more options, especially if you need to see specialists or travel.
Opting for Part A is usually free: Most people don’t pay a premium for Medicare Part A, so some choose to enroll in Part A even while keeping their employer coverage.
Helping to prevent coverage gaps later: If your job situation changes or you retire unexpectedly, already having Medicare in place can make the transition smoother.
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What are the drawbacks of getting Medicare while you’re still working?
While Medicare can offer extra protection, there are a few downsides to consider before signing up:
Paying two premiums: Medicare Part A is generally premium-free if you’ve worked and paid Medicare taxes for long enough. However, Medicare Part B — which covers office visits and other outpatient services and medical supplies — requires a monthly premium. If you keep your employer-sponsored insurance, you’ll likely pay premiums for both policies.
Coordinating two coverages: Managing two insurance plans can lead to billing questions. It’s important to know which plan pays first (primary) and which pays second. This usually depends on your employer’s size and plan rules.
Duplicating prescription coverage: If your job-based insurance already includes creditable prescription medication coverage, you may not need Medicare Part D. In that case, adding Part D could mean paying more without getting extra coverage.
Dealing with health savings account (HSA) restrictions: Once you enroll in any part of Medicare (even Part A), you can no longer contribute to a health savings account.
What happens if I decline Medicare coverage?
If you have insurance through an employer with 20 or more employees, you can usually delay enrolling in Medicare without a penalty, as long as you sign up during your special enrollment period when that coverage ends.
But if your employer has fewer than 20 employees or you don’t have job-based insurance, Medicare typically becomes your primary insurance when you turn 65. In that situation, delaying Medicare sign-up can lead to late-enrollment penalties. Here’s what those penalties may look like:
Part A: If you don’t qualify for premium-free Part A and delay enrolling, your monthly premium may increase by 10%. You’ll pay this higher premium for twice the number of years you could have had Part A but didn’t sign up, unless you qualify for a special enrollment period.
Part B: Premiums go up 10% for every 12 months you were eligible but didn’t sign up.
Part D: The penalty for signing up late for Part D is based on how long you went without creditable prescription medication coverage (coverage that’s at least as good as Medicare’s standard plan).
How do I decide between employer insurance, Medicare, or a combination of both?
Deciding between employer insurance, Medicare, or a combination of both depends on your health needs and costs. Here’s how to compare your options:
Talk with your benefits manager. Ask how your employer's plan works with Medicare and whether you would lose any coverage if you switched or dropped your work plan.
Compare your total costs and coverage side by side. Look at what you would pay for each option, including monthly premiums, deductibles, copays, and prescription medication costs.
Think about your healthcare needs: Consider the healthcare professionals you see, medications you take, and any upcoming treatments or procedures.
Frequently asked questions
Premiums for the upcoming year are released by the Centers for Medicare & Medicaid Services (CMS) in the fall, usually right before or around Medicare Open Enrollment (October 15 through December 7). If your income is above a certain amount, you may pay an additional monthly charge called the income-related monthly adjustment amount (IRMAA). You can check the current year’s premiums and see whether IRMAA applies to you on the official Medicare website.
Yes, you can enroll in an employer’s health plan if you already have Medicare. Depending on your employer’s size, either Medicare or your employer plan will pay first, and the other may cover the remaining costs.
Generally, no. However, some employers can help with Medicare premiums through specific health reimbursement arrangements, such as an Individual Coverage HRA (ICHRA) or Qualified Small Employer HRA (QSEHRA). These arrangements must be paired with an eligible group health benefit and must follow federal rules. If your employer offers one of these options, your benefits manager can explain how it works and what it covers.
Premiums for the upcoming year are released by the Centers for Medicare & Medicaid Services (CMS) in the fall, usually right before or around Medicare Open Enrollment (October 15 through December 7). If your income is above a certain amount, you may pay an additional monthly charge called the income-related monthly adjustment amount (IRMAA). You can check the current year’s premiums and see whether IRMAA applies to you on the official Medicare website.
Yes, you can enroll in an employer’s health plan if you already have Medicare. Depending on your employer’s size, either Medicare or your employer plan will pay first, and the other may cover the remaining costs.
Generally, no. However, some employers can help with Medicare premiums through specific health reimbursement arrangements, such as an Individual Coverage HRA (ICHRA) or Qualified Small Employer HRA (QSEHRA). These arrangements must be paired with an eligible group health benefit and must follow federal rules. If your employer offers one of these options, your benefits manager can explain how it works and what it covers.
The bottom line
You can enroll in Medicare even if you have health insurance through your job. To decide on the right approach, you’ll need to consider both plans’ costs and coverage details. If you decide to stick with employer-based insurance and defer Medicare enrollment, make sure you sign up for Medicare during your special enrollment period when you leave your job to avoid penalties.
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References
Centers for Medicare & Medicaid Services. (2024). Coordination of Benefits & Recovery overview.
Centers for Medicare & Medicaid Services. (2024). Small employer exception.
Cottrill, A., et al. (2025). How many physicians have opted out of the Medicare program? KFF.
Medicare.gov. (n.d.). End-Stage Renal Disease (ESRD).
Medicare.gov. (n.d.). How Medicare works with other insurance.
Medicare.gov. (n.d.). How much does Medicare drug coverage cost?
Medicare.gov. (n.d.). Special enrollment periods
Medicare.gov. (n.d.). What does Medicare cost?
Medicare.gov. (n.d.). When does Medicare coverage start?
Medicare Interactive. (2025). Creditable drug coverage. Medicare Rights Center.
Medicare Interactive. (2025). Medicare Part B late enrollment penalties. Medicare Rights Center.
The Economics Daily. (2021). Number of people 75 and older in the labor force is expected to grow 96.5 percent by 2030. U.S. Bureau of Labor Statistics.
