If you are turning 65 and still working, you have probably been told you can just stay on your employer plan and deal with Medicare later.

Sometimes that is exactly right. Sometimes it is the most expensive advice you will ever receive. The difference comes down to one number.

The number is 20

Twenty or more employees. Your group health plan generally pays first, and Medicare pays second. You can usually delay without penalty, and when the job or the coverage ends, an eight-month opens for you.

Fewer than twenty employees. Medicare generally becomes the primary payer at 65. Your group plan pays second — and it will pay as though you already enrolled in Medicare, whether or not you actually did.

Ask your HR department or plan administrator how many employees the company has, and get the answer in writing. It is a two-minute email and it is the highest-value thing on this page.

Part A is usually free. Usually.

Most people take at 65 even while working, because it costs nothing and pays secondary to the employer plan.

The exception is a real one: if you contribute to a Health Savings Account, enrolling in any part of Medicare — including premium-free Part A — means you must stop contributing. Worse, Part A enrollment can be backdated up to six months, which can make contributions you already made retroactively improper.

If you have an HSA and you are approaching 65, stop and get advice before you enroll in anything. This is the one case where the free thing is not free.

What COBRA and retiree coverage do not do

They do not count as active employer coverage. Not for Part B, not for the Special Enrollment Period, not for the penalty.

I want to be blunt about this because it is the single most common expensive mistake I see:

  • COBRA does not create a Part B Special Enrollment Period. If you are on COBRA at 65, your Part B deadline is your birthday window, not the end of COBRA.
  • Retiree coverage from a former employer is treated the same way. It is not active employment coverage.
  • Severance health benefits are not active employment coverage either, regardless of what the severance letter implies.
  • Signing up for Medicare can end your COBRA coverage — the reverse of what people assume.

The drug coverage question

Separate from Part B, you need to know whether your employer's drug coverage is — expected to pay at least as much as standard .

Most large employer plans are. Not all are. Your plan is required to tell you in writing each year, usually in a notice that arrives in the fall.

Find that notice. Keep it. If you cannot find it, email HR and ask for it. Sixty-three days without creditable coverage starts a permanent Part D penalty, and the only way to prove you had it is the letter.

When you finally do retire

The eight-month Part B Special Enrollment Period sounds generous, and it is — but the drug coverage clock is only two months, and the Medicare Advantage clock is two months as well.

People hear "eight months" and relax, then discover they missed the two-month window for the other pieces.

Your next step

Check which window applies to you — the second question is about employer coverage, and the answer changes everything downstream of it.