Working Past 65 or on COBRA: When You Must Sign Up for Medicare Part B, and What a Late Penalty Costs

Whether you can delay Part B after 65 comes down to one question: are you (or your spouse) still working and covered through that job, at an employer with 20 or more employees? If so, sign up within 8 months after the job or coverage ends and there's no penalty. COBRA after you leave, retiree coverage and ACA Marketplace plans don't count as current-employment coverage, so the 8 months start the month after your job ends. Miss the window and Part B costs 10% more for each full 12 months, for life.

The Initial and General Enrollment Periods

Your first chance to join is the Initial Enrollment Period: the 3 months before your 65th-birthday month, that month and the 3 months after, 7 months in all. Sign up before your birthday month and coverage starts the 1st of that month; sign up during it or in the following 3 months and coverage starts the 1st of the month after you apply.

Miss that window without a Special Enrollment Period and you can only sign up during the General Enrollment Period, January 1 to March 31 each year. Since 2023, coverage starts the month after you sign up, and a late penalty may apply.

How big are the penalties?

Part B: 10% of the standard premium for each full 12 months you could have had Part B but didn't, usually for life. Medicare.gov's 2026 example: 24 months late adds 20%, and 20% of $202.90 is $40.58, so the premium becomes $243.50 a month.

Part D: 1% of the national base beneficiary premium for each month you had neither Part D nor creditable drug coverage. The 2026 base premium is $38.99, so 14 months late adds $5.50 a month (rounded to the nearest $0.10), for as long as you have Part D. A gap of 63 days or more counts.

Part A, if you have to buy it: 10% more, for twice the number of years you were late.

Employer coverage: who pays first?

Employer with 20+ employees, and you or your spouse still work there: the group plan pays first and Medicare second. You can take premium-free Part A (skip it too if you're still contributing to an HSA) and sign up for Part B when the job ends.

Employer with fewer than 20 employees: Medicare pays first. Sign up for A and B at 65, or the group plan may pay only what's left after the amount Medicare would have paid, which can leave big bills uncovered.

How employees are counted: whether the employer had 20 or more employees on each working day in at least 20 weeks of the current or prior year. If you're unsure, ask HR to confirm in writing whether Medicare pays first or second.

Under 65 on Medicare because of disability: the threshold is 100 employees. ESRD: the group plan pays first for the first 30 months regardless of employer size.

Why doesn't COBRA count?

Medicare.gov puts it plainly: COBRA isn't considered group health plan coverage based on current employment. The Part B Special Enrollment Period runs for 8 months starting the month after your employment or group coverage ends, whichever comes first. COBRA is continuation coverage after you leave, so the 8-month clock is already running while you're on it.

With both COBRA and Medicare: Medicare pays first and COBRA second (except during the ESRD coordination period). If you're eligible for Part B and don't sign up, COBRA as the secondary payer may pay only its own share, or even recover payments later.

COBRA first, then Medicare: the plan can end your own COBRA early once you become entitled to Medicare; your spouse's and children's COBRA generally continues. Medicare first, then COBRA: you can still elect COBRA, and Medicare pays first.

Part D works differently: if your COBRA drug coverage is creditable (the plan sends a notice each year), those months don't count toward the Part D penalty. When COBRA ends, you have 2 months to join a Part D plan.

Example (hypothetical numbers, to show the method)

Mr. Wang was born in 1959. When he turned 65 in 2024 he was still working at a 500-person company with its coverage, so he didn't sign up for Part B. He retired on March 31, 2025, elected 18 months of COBRA and kept it through the end of September 2026. In October he went to sign up for Part B and learned his Special Enrollment Period was over.

His Special Enrollment Period: 8 months starting April 2025, ending at the end of November 2025.

What he can do now: sign up during the General Enrollment Period, January 1 to March 31, 2027. If he signs up in January, Part B starts February 1. From October 2026 through January 2027 he has no primary coverage at all.

The penalty: from April 2025 to January 2027 he went about 22 months without Part B, which is one full 12-month period, so Part B costs 10% more for life. At the 2026 standard premium that's $202.90 × 110%, about $223.20 a month, and in later years 10% on top of each year's standard premium.

Part D: if his COBRA drug coverage was creditable and he joins a Part D plan within 2 months after COBRA ended in September 2026, he owes no Part D penalty.

What he could have done: sign up for Part B between April and November 2025, with Medicare paying first and COBRA second, or skip COBRA and use Medigap plus Part D or a Medicare Advantage plan.

How to avoid a penalty

Ask first: before 65, get HR to confirm in writing the employer's size, whether your plan is current-employment coverage and whether the drug coverage is creditable.

Plan it before you leave: when you set your retirement date, time Part B to start the day after group coverage ends. Ask your employer to complete Form CMS-L564 showing the months you had coverage, and submit it with Form CMS-40B online at ssa.gov.

Don't lean on COBRA: after 65, COBRA is secondary coverage only. It can still be useful for a spouse or children who need the group plan.

Keep the proof: the employer's written confirmation, CMS-L564, creditable coverage notices and your enrollment confirmation number all help if a penalty is ever disputed.

If you have an HSA: stop contributing 6 months before you apply for Medicare, because Part A reaches back up to 6 months.

Exceptional circumstances: if an employer or plan gave you wrong information, or a disaster or similar event kept you from enrolling, you can ask SSA for one of the exceptional-circumstances Special Enrollment Periods added in 2023, decided case by case.

How we can help

YCL lines up your retirement date, Medicare start date and the month to stop HSA contributions, and projects the IRMAA that shows up two years later. For enrollment, we help you prepare CMS-40B, CMS-L564 and the rest and complete the online application together; which plan you choose is your decision. We're not an insurance broker and don't recommend plans. For the full enrollment timeline, cost table and Medigap comparison, see our Medicare guide; if you're under 65 on a Marketplace plan, see the ACA guide. Start with a 15-minute free consultation, or reach us on WeChat at YCLUSA.

Sources

Medicare.gov: When does Medicare coverage start?

Medicare.gov: Avoid late enrollment penalties

CMS: 2026 Medicare Parts A & B Premiums and Deductibles

CMS: Form CMS-L564, Request for Employment Information

CMS: Form CMS-40B, Application for Enrollment in Medicare Part B

Last checked: November 8, 2026

This article is general information, not tax, legal, insurance or investment advice for any individual situation.