Working Past 65 and Medicare in Arizona

If you are still working at 65 and covered by your own or your spouse's employer plan, you may be able to delay Part B without a penalty. The key is employer size. With 20 or more employees, the group plan pays first and Medicare second, so many people delay Part B. With fewer than 20 employees, Medicare usually pays first and you need Parts A and B. When the job or the coverage ends, you have an 8-month Special Enrollment Period to sign up for Part B. If you contribute to a Health Savings Account, stop contributing before Medicare starts, because Part A can be backdated up to six months.

The 20-employee rule

Ask your HR or benefits office directly: how many employees does the company have for Medicare purposes, and how does the plan coordinate with Medicare at 65? Get the answer in writing if you can. If you qualify for Medicare through disability rather than age, the threshold is 100 employees instead of 20.

Should you take Part A at 65?

Part A is premium-free for most people, so many workers take it at 65 even while keeping the employer plan. It can act as secondary coverage for hospital stays.

The big exception is a Health Savings Account. Once you are enrolled in any part of Medicare, you can no longer contribute to an HSA. If you apply for Part A after you turn 65, coverage is backdated up to six months (but not earlier than the month you turned 65). Stop HSA contributions six months before you apply to avoid a tax penalty on excess contributions. You can keep spending money already in the HSA on qualified medical costs, including Medicare premiums.

If you start collecting Social Security retirement benefits, Part A is automatic and cannot be declined, so time your Social Security claim with your HSA in mind.

Comparing your employer plan with Medicare

Delaying Part B is allowed, not required. Sometimes Medicare plus a supplement or an Advantage plan costs less than staying on the employer plan, especially if your employer plan has a high deductible or expensive premiums for a spouse.

• What do you pay each month for the employer plan, and what would you pay for Part B plus a supplement and Part D, or plus an Advantage plan?
• What are the deductible and out-of-pocket maximum on the employer plan?
• Is the employer plan's drug coverage creditable? Your employer must send a yearly notice saying so.
• Does your spouse depend on your employer plan? If you leave it, will they need their own coverage?

When you retire or the coverage ends

You get a Special Enrollment Period of 8 months to sign up for Part B, starting the month after your employment or the group coverage ends, whichever happens first. You have 63 days to get Part D or other creditable drug coverage without a penalty. Do not wait until the end of the 8 months if you want to avoid a gap, because COBRA does not extend the window.

To enroll in Part B outside your first window, Social Security uses two forms: CMS-40B (Application for Enrollment in Part B) and CMS-L564 (Request for Employment Information), which your employer completes to prove you had group coverage based on current work. Both are linked on our Resources page. You can also submit them online through Social Security.

An example timeline

Here is a hypothetical illustration, not advice for your situation. Say you live in Chandler, turn 65 in March 2026, and work for an employer with several hundred employees, with an HSA-eligible health plan through work.

Because your employer has 20 or more employees, the group plan pays first, so you can delay Part B. Because you are contributing to your HSA, you also delay Part A and do not claim Social Security yet. You keep the yearly creditable coverage notice for your drug plan.

You plan to retire on June 30, 2028. You stop HSA contributions at the end of December 2027, six months before you will apply. In May 2028 you complete forms CMS-40B and CMS-L564 with your HR office, apply for Parts A and B to start July 1, and choose drug coverage that starts the same day. Your Medigap Open Enrollment Period then runs from July through December 2028, and you can use it to buy a supplement without health questions.

Because your final working years had higher income, you also check whether IRMAA will apply in 2028 and 2029, and keep form SSA-44 in mind once your income falls.

Common mistakes to avoid

• Dropping employer coverage for COBRA and assuming Part B can wait. COBRA is not coverage from current work, so the 8-month clock is already running.
• Continuing HSA contributions after applying for Social Security or Medicare.
• Assuming a small employer's plan will pay first. Under 20 employees, it usually will not.
• Missing the 63-day drug coverage deadline because the medical side was sorted first.
• Not keeping proof of creditable drug coverage notices.
• Forgetting that a big final year of income can trigger IRMAA two years later. Form SSA-44 can help if your income has since dropped because you stopped working.

Working past 65 in Arizona: local notes

Many East Valley employers, from school districts to semiconductor and health care employers, offer group plans that easily meet the 20-employee threshold, but smaller practices and family businesses often do not. If you work for a small employer in Chandler or Gilbert, check the size question first.

If you are self-employed or buying coverage on HealthCare.gov, that coverage is not employer coverage, and you generally need to enroll in Medicare during your Initial Enrollment Period. Marketplace premium tax credits generally end once you are eligible for premium-free Part A.

If your spouse is younger than 65 and was on your employer plan, our guide to retiring before 65 covers their options, including the Arizona Marketplace and COBRA.

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The bottom line

If your employer has 20 or more employees and you have group coverage through current work, you can usually delay Part B safely; take Part A unless you are contributing to an HSA. If your employer is smaller, or your coverage is COBRA or a retiree plan, enroll in Parts A and B on time. When work ends, use your 8-month window, keep your drug coverage continuous, and buy any Medigap policy within six months of starting Part B.