Dear Rusty: I’m age 64 and still working full time, and plan to continue working at least until I’m 70 — it’s a good job, and I enjoy it. My job comes with health insurance, so I don’t really need additional coverage, but I understand I will be required to sign up for Medicare Part A anyway when I turn age 65 next year. What I don’t understand is Part B. A colleague of mine, who is a little older than I am, said she signed up for Part B because a penalty will be incurred if we wait until we retire from our jobs and actually need the additional insurance. I’m not sure she’s right. Can you explain what I should do?

Signed: Confused About Medicare

Dear Confused: We’re happy to assist you with understanding this. First, enrolling in Medicare Part A (coverage for inpatient hospitalization service) is mandatory to collect Social Security after age 65. If you do not plan to take your Social Security benefits yet, you can defer enrolling in Part A until you claim Social Security. But Medicare Part A is also free to those eligible for Social Security, so there is little reason not to enroll in Part A at age 65 and, when you claim Social Security, you will be automatically enrolled.

Part B, which is coverage for outpatient health-care services (doctors, medical tests, etc.), is different. Part B is always optional because there is a premium associated with it (standard premium is $185 per month in 2025), but nearly everyone over age 65 requires health-care coverage. If, however, you are employed and have “creditable” health-care coverage from your employer (“creditable” is a group plan with more than 20 participants), then you can defer enrolling in Medicare Part B until your creditable employer coverage ends. And you can do so without incurring a “late enrollment penalty” for enrolling in Part B outside of your initial enrollment period. When your creditable coverage from your employer ends, you will enter an 8-month Medicare “special enrollment period,” which permits you to enroll in Part B without penalty.

Thus, as long as your employer coverage is “creditable,” you can defer enrolling in Part B without penalty. FYI, you can also enroll in Part B a couple of months prior to your employer coverage ending, asking that your Part B coverage starts when your employer coverage ends, to avoid any gap in health-care coverage. Note: you will likely need your employer to provide you with proof of creditable coverage when you later enroll in Part B.

A couple of extra thoughts: If you require prescription-drug coverage when your employer coverage ends after age 65, you only have 63 days to acquire that drug coverage without incurring a “Part D” (drug plan) late-enrollment penalty. So, if needed, you should not wait to get insurance coverage for prescription drugs after you employer coverage ends.

If you now have a health-savings account (HSA) through your employer, you should discontinue any HSA contributions well before (perhaps as much as six months before) your enrollment in Medicare Part A. That’s because Part A is not considered a “high deductible” insurance plan (a “high deductible” plan is a requirement for having an HSA). If you do not have an HSA, you need not be concerned about this. If you do, we can also provide you with more information on this.

I hope this answers your questions, but we are always here to assist if you need anything further. Contact us at SSAdvisor@amacfoundation.org, or at (800) 750-2622.

Russell Gloor is a national Social Security advisor at the AMAC Foundation, the nonprofit arm of the Association of Mature American Citizens (AMAC). The 2.4-million-member AMAC says it is a senior advocacy organization. Send your questions to: ssadvisor@amacfoundation.org.

Author’s note: This article is intended for information purposes only and does not represent legal or financial guidance. It presents the opinions and interpretations of the AMAC Foundation’s staff, trained, and accredited by the National Social Security Association (NSSA). The NSSA and the AMAC Foundation and its staff are not affiliated with or endorsed by the Social Security Administration (SSA) or any other governmental entity.