Medicare vs Staying on Employer Health Plan at 65

The 20-employee rule

If your employer has 20+ employees, employer coverage is primary at 65 and you can delay Part B without penalty. Special Enrollment Period gives you 8 months after coverage ends to sign up. If your employer has fewer than 20, Medicare becomes primary at 65 and the employer plan secondary, so you usually have to enroll in Part B at 65.

Cost comparison

Employer plan at 65: average employee share is $130-$280 per month for individual coverage at large employers, often less if employer subsidizes heavily. Medicare Part B + Part D + Medigap: $400+ per month before IRMAA. Employer plan often wins on premium for active employees, even before counting employer subsidy of dependents.

The HSA factor

Employer HDHP with HSA: $4,300 individual / $9,300 family pre-tax contribution annually. Plus catch-up of $1,000 at 55+. Medicare ends HSA contributions immediately. For high earners in their 60s, two extra years of HSA = ~$20k of pre-tax savings + ~$6k of federal tax avoided at 32% bracket.

Coverage breadth

Most employer plans offer dental, vision, mental health, and FSA. Medicare offers none of these in Original form. Medicare Advantage bundles them but the dental/vision benefits are usually capped at $1,000-$2,500 per year.

The Part A only option

Some workers enroll in just premium-free Part A at 65 and skip Part B. This is allowed but ends HSA eligibility (Part A counts as Medicare coverage). For the HSA crowd, the answer is no Part A either.

Verdict

Working past 65 at a large employer with a good HDHP and HSA: stay on the employer plan, skip all Medicare. Working at a small employer (under 20): you usually need Part B at 65 to avoid coverage gaps. Retiring at 65: enroll in Medicare during your initial enrollment period.