The 20-employee rule
Whether you need Part B at 65 depends on who pays first. Medicare's coordination-of-benefits rules say:
| Your situation | Who pays first | Part B at 65? |
|---|---|---|
| Group coverage from your or your spouse's current job, employer with 20 or more employees | Job-based plan | You can usually delay without a penalty |
| Group coverage from current work, employer with fewer than 20 employees | Medicare | Generally needed; ask the plan, since it may pay little or nothing for Part B services |
| COBRA, retiree coverage, or an individual or Marketplace plan | Medicare | Sign up when first eligible to avoid a penalty |
A small employer that's part of a multi-employer plan where at least one employer has 20 or more employees follows the first row. Ask your benefits office or the plan how it works with Medicare before deciding.
Signing up later: the eight-month window
When you or your spouse stop working, or the job-based coverage ends, whichever comes first, you get an eight-month Special Enrollment Period to sign up for Part B with no penalty. To use it, you'll send Social Security form CMS-40B and form CMS-L564, which your employer completes to show you had group coverage from current work. You can do this online at ssa.gov.
COBRA doesn't stop the clock. The eight months start when your job ends, even if you take COBRA. Many people miss the window waiting for COBRA to run out, and then pay a penalty for as long as they have Part B.
If you miss it
The Part B late enrollment penalty adds 10% of the standard premium for each full 12 months you could have had Part B but didn't. You may also have to wait for the General Enrollment Period, January 1 to March 31, with coverage starting the month after you sign up. Try the penalty calculator.
Part A and Health Savings Accounts
Most people pay no premium for Part A, so you can take it at 65 while still working and it may pay second to your job-based plan. The exception is a Health Savings Account: once you have any part of Medicare, you can't contribute. Part A can be backdated up to six months when you sign up after 65, so Medicare.gov suggests stopping HSA contributions six months before you apply.
Arizona notes
Whether you work for an Arizona state agency, a school district, a city, a private company or yourself, the same federal rules apply. If you're self-employed with a plan in your own name from the Marketplace, that coverage isn't group coverage from current work. Your Medigap open enrollment period starts when you sign up for Part B, so timing Part B also sets your best window to buy Medigap. See working past 65.
Get help
A licensed insurance agent with Benefits Life can compare your employer plan with Medicare options from the companies they work with, at (602) SENIORS (602-736-4677), TTY 711.
Related questions
When can I buy Medigap in Arizona?
How Part B timing sets your Medigap window.
When can I change my Medicare plan?
Including the window after job-based coverage ends.
Can I use IHS and Medicare?
Why IHS doesn't delay the Part B penalty.
Sources
- Medicare.gov — Working past 65
- Medicare.gov — COBRA coverage
- Medicare.gov — How Medicare works with other insurance (20-employee rule)
- Medicare.gov — Avoid late enrollment penalties
- Medicare.gov — Enrolling in Part A and Part B
- Social Security — Medicare (signing up, forms CMS-40B and CMS-L564)
Frequently asked questions
How long do I have to sign up for Part B after I stop working?
You have eight months, starting the month after your job or your job-based coverage ends, whichever comes first. The eight months run even if you take COBRA. If you miss it, you may have to wait for the General Enrollment Period and pay a late penalty.
Does COBRA let me delay Part B?
No. COBRA isn't coverage from current work, so it doesn't extend your time to sign up. Medicare.gov advises not to wait until COBRA ends. If you already have Medicare when COBRA starts, COBRA usually pays second.
What is the Part B late enrollment penalty?
It's 10% of the standard Part B premium for each full 12 months you could have had Part B but didn't, without qualifying job-based coverage. You usually pay it for as long as you have Part B. In 2026 the standard premium is $202.90 a month.
Should I take Part A if I'm still working?
Most people get Part A with no premium, so many take it at 65. But if you contribute to a Health Savings Account, enrolling in Part A ends your ability to contribute, and Part A can start up to six months retroactively, so stop contributions about six months before you sign up.
