Your Medicare Transition Team
Your Medicare Transition Team

Is it Mandatory To Sign Up for Medicare At 65?

Do you have to sign up for Medicare?

In this article, we will isolate our thoughts to when you are first turning 65 years old. If we did not touch on your specific situation, please call one of our advisors for additional information.

When coming up to your Medicare eligibility, many people ask the question, Is it mandatory to sign up for Medicare at 65? Short answer? Maybe.

There are definitely some situations where it is mandatory to enroll, but there are also many times that it is not required of you to enroll, AND there will not be a penalty involved. We know, hard to believe because you hear so much about the famous “Medicare penalty if you don’t do something correctly” Read on.

We’re going to address some of the most common situations and let’s see if you can identify your situation. If not? Call us and ask one of our advisors for assistance. Also note that this article won’t get into describing “what” Part A and Part B are. 


I’m turning 65 (or my spouse is) and still working for an employer with OVER 20* employees.

As long as you are on a group plan provided to you through “active employment coverage” (meaning you are covered through your workplace or your spouse’s workplace insurance and that spouse is actively working), AND the employer has over 20 employees AND you PREFER to keep your employer insurance, you may do so. Absolutely verify with your human resources department that your coverage (including your prescription drug coverage) is what is called “creditable coverage” according to Medicare. If you get the all clear? You may stay enrolled into your group plan. You will not be penalized for a late enrollment into Medicare’s Part B.

How this relates to Part A of Medicare. If you stay on your group plan and you are on an HSA compatible plan and would like to continue contributing to that account, do NOT enroll in Medicare’s Part A. Part A is not considered a high deductible plan, thus it eliminates your ability to contribute. **Many people just sign up for Part A because “it’s free” or “I thought I had to.”

Caveat – if you are working AND collecting Social Security benefits prior to age 65, you will be automatically enrolled into Parts A and B. You will be required to keep Part A coverage with Medicare but you may rescind Part B coverage because you have your group insurance. Note that you will NOT want to contribute to the HSA any longer at that point if you are collecting your social security benefits.

Things to think about and/or compare

So, just because you HAVE employer insurance, doesn’t always mean that it’s your best place to secure your health insurance coverage. You should compare the premiums that you are paying, what the coverage provides you, what the co-pays, co-insurance are, etc. etc. Call us to run through this if needed. It’s just not a “oh, I have group insurance, I don’t want or need Medicare”. It’s just not that simple! Imagine that…!

*These numbers change from 20 to 100 when we are talking about Medicare coverage and those on Social Security Disability Income benefits.

I’m turning 65 (or my spouse is) and still working for an employer with UNDER 20 employees

If this is you, you have to sign up for Medicare Parts A and B. Sorry, but you do.

Why? Because Medicare becomes your primary insurance carrier if you are eligible for Medicare and on a small employer’s health insurance plan. See this Medicare guide for the official “who pays first”.

If you do NOT get your Part B in this case, you could be on the hook for claims as your group insurance goes to the secondary slot in terms of payors. Remember, you are ultimately the responsible party for knowing these rules; so be careful.

Cobra coverage and Medicare

We have people call us and say “Is it mandatory to sign up for Medicare at 65? I am retiring and my employer has offered to give me (meaning the employer will pay for it) 12 months of Cobra coverage so I’m all set until I’m 66, right?”

It sounds blissful, but no. 

When you take Cobra coverage and you are “eligible for Medicare” – that means age 65; that Cobra coverage becomes the primary insurance to Medicare Parts A and B (go back above and see the “who pays first guide” again). 

Real world? That means you may tell your employer thank you very much, but you still need to get your Medicare Parts A/B in place. If you don’t? Well, if you have a large claim, the Cobra carrier (remember they are secondary now) could very well reject 80% of the claim as they are the “secondary”. Don’t find out the hard way. We see this issue happening more and more and more as people work longer. Call us for a quick assessment before you make a mistake. And, watch our YouTube video explaining Cobra and Medicare here. Super important to understand how it works. 

Turning 65 and have retiree coverage?

If a beneficiary is eligible for a retiree plan through their or their spouses previous employer, that retiree plan comes secondary to Medicare. It is important for retirees to still have Medicare A and B active (unless there is a special circumstance, like FEHB coverage). Typically, the retiree plan will have contacted you and walked you through what you need to do in order to enroll into their plan. And, that typically requires you to enroll into Medicare’s Parts A and B. 

Sometimes, the retiree plan is a good secondary plan to Medicare but it is still important to weigh your options to make sure you are not overspending and you are getting the coverage that you need.  We do see the classic retiree plans get a bit worse and worse as time goes by so it’s important to pay attention to your co-pays and total premiums so that you can make a good comparison to what you can secure in the “open market” if you will.  Often, a retiree medical plan will have stronger prescription coverage (i.e. better coverage) so pay extra attention to that area. 

Have ACA/Marketplace coverage at age 65?

You’re an easy one. Medicare is going to be the next step for you as you turn 65 years old if you have Marketplace coverage currently.

If you are receiving a subsidy on that current plan, it will stop the month that you turn 65 years old. You will then start paying Medicare Part B premiums.  If you do not receive a subsidy? You’re typically the very happy camper when you sign up for Medicare’s coverage and the ancillary products. You’ve saved money and have better coverage.

Marketplace coverage IS a situation where if you stayed with that coverage and didn’t file for Medicare’s A and B, and then went to get it later, you would be looking at a penalty situation.  Marketplace insurance is not considered credible coverage by Medicare’s standards, thus you’d be penalized for the late enrollment. 

Method to the Madness

We don’t see penalties occur that often, but you can see from some of the above situations why it’s so important for you to check in with us at age 64.5 to be sure you’re doing things properly. There seriously is a right time to do the right thing related to Medicare.

We’re here to teach you the method to the madness.