Medicare when you retire is a paperwork problem with a deadline attached. You turned 65 and kept working. Your group health plan covered you, so you skipped Part B. That was probably allowed. Now you are choosing a last day of work. The clock that matters starts the month your job or your group coverage ends. Social Security calls that window a Special Enrollment Period. It runs 8 months for Part B. It runs much shorter for drug coverage.
This guide walks the 60 days on either side of your last day. It names the forms, the deadlines and the penalty arithmetic. It does not promise an outcome. It describes the process, and it tells you who to confirm each figure with.
The Rule Behind Medicare When You Retire
Everything turns on one number: how many people your employer employs. That number decides who pays your claims first. CMS calls this the Medicare Secondary Payer rule. The Medicare Secondary Payer overview at CMS.gov sets out the working-aged provision.
If the employer has 20 or more employees, the group health plan pays first. Medicare pays second. If the employer has fewer than 20 employees, Medicare pays first. The group plan pays second. Both full-time and part-time employees count toward 20.
That distinction drives every decision about medicare when you retire. In a large-employer plan, delaying Part B is usually safe. In a small-employer plan, delaying Part B can leave you with the primary payer missing. Confirm your employer’s count with your HR or benefits administrator in writing.
Coverage must be based on current employment status. Retiree coverage is not current employment. COBRA is not current employment. Medicare treats both differently, and that is where most timing mistakes begin.
Your Choices at 65
Most people at 65 with job coverage take Part A and delay Part B. Part A is premium-free if you or a spouse have 40 quarters of Medicare-taxed work. Some people delay both parts, usually to protect an HSA. Some enroll in everything and drop the employer plan.
None of those is automatically right. The table below matches your situation to the payer order and the next step. Read it against your own plan documents, not against what a coworker did.
| Your situation | Who pays first | What to do |
|---|---|---|
| Employer with 20+ employees, you or your spouse still working | Group health plan pays first, Medicare second | Delaying Part B is generally permitted. Keep written proof of coverage for the CMS-L564. |
| Employer with fewer than 20 employees | Medicare pays first, group plan second | Ask HR whether the plan requires Part B enrollment. Many small-group plans pay as if you have it. |
| Multi-employer plan where at least one employer has 20+ employees | Group health plan pays first | Ask the plan administrator to confirm in writing which rule applies to you. |
| COBRA after your last day | Medicare pays first | COBRA is not current employment. Your Part B Special Enrollment Period is already running. |
| Retiree coverage from a former employer | Medicare pays first | Retiree plans generally expect you to have Part A and Part B. Confirm with the plan before your last day. |
| Small-employer plan and you want to keep it as primary | Depends on an approved exception | See the Small Employer Exception page at CMS.gov. The employer applies, not you. |
The Special Enrollment Period for Part B runs 8 months. It starts the month after employment ends or the month after group coverage ends, whichever comes first. Medicare describes this on its Special Enrollment Periods page.
Eight months sounds generous. It is not. Coverage does not start the day you apply. Ask Social Security for your exact effective date before you cancel anything.
The Penalty If You Get It Wrong
The Part B late enrollment penalty is 10% of the standard premium for each full 12-month period you could have had Part B and did not. Months covered by a group plan through current employment are excluded from that count. The standard Part B premium is $202.90 in 2026.
The arithmetic is plain. Two full uncovered years is a 20% penalty. Three is 30%. The penalty is added to your monthly premium for as long as you have Part B. Medicare explains this on its avoid late enrollment penalties page.
Part D works differently. The penalty is 1% of the national base beneficiary premium, times the number of full months you went without creditable drug coverage. The 2026 national base beneficiary premium is $38.99. The result is rounded to the nearest 10 cents and added to your plan premium.
The trigger for Part D is a gap of 63 days or more without creditable coverage. See the CMS creditable coverage and late enrollment penalty page and the Part D late enrollment penalty fact sheet.
Both penalties last for life. Neither goes away when you switch plans. The base amounts change each year, so the dollar figure moves. That permanence is the whole reason medicare when you retire deserves a calendar entry rather than a good intention.
Medicare When You Retire: the Paperwork
Two forms do the work. Form CMS-40B is the Request for Enrollment in Medicare Part B. You sign that one. Get it from the CMS-40B form at CMS.gov.
Form CMS-L564 is the Request for Employment Information. It proves your group coverage was based on current employment. Section A is yours. Section B is your employer’s, and your employer signs it. The form lives on the CMS-L564 page at CMS.gov.
Send both forms together to Social Security. Some people can submit online. The SSA Part B only sign-up page lists the current submission options. Do not send CMS-40B without the CMS-L564 if you are using a Special Enrollment Period.
Timing for medicare when you retire is where the 60-day frame matters. Start 60 days before your last day. Ask HR that week for the signed Section B. Employers move slowly, and a retired benefits contact is harder to reach.
If your employer will not sign, Social Security can accept other proof. Pay stubs showing health premium deductions and plan documents are examples. Ask your local field office what it will accept in your case before you assume anything.
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File in the 60 days after your last day if you have not already. Then confirm your effective date in writing. Handling medicare when you retire in that order keeps the paperwork ahead of the coverage gap instead of behind it.
The Traps People Fall Into
COBRA is the biggest one. COBRA is not coverage based on current employment. Electing COBRA does not extend your Part B Special Enrollment Period. Your 8-month clock started when the job coverage ended, not when COBRA ends.
Retiree coverage carries the same trap. It is not current employment either. Most retiree plans assume you carry Part A and Part B, and they pay accordingly. Ask your plan administrator what it pays if you have no Part B.
HSAs are the trap with tax consequences. Once you enroll in any part of Medicare, your HSA contribution limit is zero for that month forward. Part A can be backdated up to 6 months when you enroll after 65. Contributions made during those retroactive months become excess contributions.
That means many people stop HSA contributions 6 months before their Medicare start date. Read IRS Publication 969 and check the instructions for Form 8889. Confirm your own numbers with a tax preparer. The retroactive rule surprises people who were never told about it.
Small employers are the quiet trap. If your employer has fewer than 20 employees, Medicare is already the primary payer. Skipping Part B there can leave large bills unpaid. Verify the count with HR, then verify who pays first on the Medicare who pays first page.
Drug coverage is the last one. Your employer plan may or may not be creditable. The plan must tell you. Keep the annual creditable coverage notice, because it is the evidence that protects you from the Part D penalty.
Frequently Asked Questions
Does my Part B coverage start the day I file?
No. Effective dates are set by rule, not by your filing date. Ask Social Security for your exact start month before you drop employer coverage. Getting the effective date right is the practical core of medicare when you retire.
Who signs Form CMS-L564?
Your employer or the plan administrator signs Section B. You complete Section A. If the employer will not sign, ask your Social Security field office what alternative proof it accepts. Do not skip the form and hope.
Can I keep contributing to my HSA if I only take Part A?
No. Any Medicare enrollment ends HSA eligibility from that month. Part A can also be backdated up to 6 months. Confirm your specific dates with your tax preparer and with Social Security.
How long do the penalties last?
Both the Part B and Part D late enrollment penalties last as long as you hold that coverage. They do not expire and do not reset when you change plans. That is why medicare when you retire is worth planning 60 days ahead rather than fixing afterward. For general timing, see the SSA when to sign up page and the Medicare enrollment forms page.
Key Takeaways: Medicare When You Retire
- Employer size decides everything. Whether medicare when you retire is a choice or a requirement turns on the 20-employee rule.
- Part A is usually free. Most people take it at 65 even when medicare when you retire lets them delay Part B.
- Except with an HSA. Part A ends HSA contributions, the one case where medicare when you retire means delaying Part A too.
- COBRA does not count. For medicare when you retire, COBRA is not active employer coverage, and assuming otherwise creates a lifetime penalty.
- The penalty never ends. The Part B penalty from a medicare when you retire mistake is added to every premium for life.
- Keep the creditable coverage letter. It is the proof that medicare when you retire did not leave a gap in drug coverage.
- Two forms, not one. medicare when you retire paperwork usually needs CMS-40B from you and CMS-L564 signed by the employer.
Compare Your Options
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Official Sources & Resources
- Social Security — Medicare enrollment: https://www.ssa.gov/medicare
- IRS Publication 969 (HSAs): https://www.irs.gov/publications/p969
- Medicare.gov: https://www.medicare.gov
- CMS.gov: https://www.cms.gov
- Find your SHIP counselor: https://www.medicare.gov/talk-to-someone
Checked against the official sources above in September 2026. Rules and dollar figures change; if a notice you received disagrees with this page, the notice wins — and please tell us. General information, not legal, financial or medical advice.