If you're still on the job at 65, the rules aren't as scary as they sound — but the lifetime penalty is real.

One of the most common questions I get from clients coming up on 65 sounds simple, but has a few wrinkles: "I'm still working — do I have to sign up for Medicare right now, or can I wait?"

It's a fair thing to lose sleep over. Time it wrong and you can get hit with a penalty that follows you around for the rest of your life. The good news is that for most people who are still working, the rules are pretty manageable once you know which questions to ask.

First, the one window that matters

Your Initial Enrollment Period

Everybody gets a 7-month window around their 65th birthday to sign up: the three months before the month you turn 65, the birthday month itself, and the three months after. That's the no-hassle window. The whole game is figuring out which parts of Medicare you actually need to grab during it — and which ones you can safely put off because you're still working.

Part A: almost always say yes

Most people have paid into Medicare their whole career, so Part A (hospital coverage) is premium-free. Since it doesn't cost you anything, signing up at 65 is usually a no-brainer, even while you're still working.

Part B: this is the real question

Part B (doctors, outpatient care) is the one with a monthly premium — $202.90 a month in 2026 for most people, and more at higher income levels. That's why people want to delay it. And if you have solid coverage through your job, you usually can delay it with no penalty at all.

But — and this is the part that trips people up — whether you can delay depends on one thing most folks never think about.

The catch: how big is your employer?

The 20-employee line in the sand

The "I'm still working, so I'll wait" exception hinges on company size:

• 20 or more employees: Your group health plan stays primary. You can delay Part B with no penalty and pick it up later when you retire.
• Fewer than 20 employees: Medicare usually becomes your primary insurance at 65 — which means you likely need to enroll in Part B now, even though you're still working.

What the penalty actually costs

Here's why everyone's nervous about it. If you should have signed up for Part B and didn't, Medicare adds 10% to your premium for every full 12 months you went without it — and that surcharge is permanent.

When you DO retire: the 8-month clock

Once you (or your spouse) stop working or lose the employer coverage — whichever happens first — you get a Special Enrollment Period of 8 months to pick up Part B with no penalty. Easy enough.

Don't forget about prescriptions (Part D)

Part D (drug coverage) has its own separate late penalty. As long as your employer plan's drug coverage is "creditable" — basically, at least as good as Medicare's — and you don't go more than 63 days without coverage, you're fine. When the job coverage ends, get a Part D plan promptly and you'll avoid it.

So, what should you actually do?

Here's the short version for most people still working at 65:

• Sign up for Part A during your 7-month window — unless you're actively contributing to an HSA.
• Confirm your employer size and whether your plan is primary. 20+ and primary? You can usually wait on Part B.
• When you retire, enroll in Part B within 8 months of the job ending — not when COBRA ends.
• Keep proof of your employer coverage and the dates, in case you ever need to show it.

Not sure which box you fall into?

Everyone's situation has a wrinkle — a spouse's plan, an HSA, the size of your employer, your income bracket. Those details change the answer. If you're staring down 65 and want a second set of eyes before you file, that's exactly the kind of thing we sort out together. Let's talk it through.