If you're still working at 65, whether you should enroll in Medicare or delay depends on your employer's size, COBRA, and your HSA — explained in plain English.
Quick answer: If you're turning 65 and still working in California, whether you need Medicare right away depends mostly on how many employees your (or your spouse's) employer has. If the employer has 20 or more employees, you can usually delay Part B without a penalty and enroll later through a Special Enrollment Period. If it has fewer than 20 employees, Medicare is typically your primary coverage, so you generally should enroll at 65. COBRA and retiree coverage do not let you delay Part B. Free, unbiased help is available from an independent broker and through California's HICAP program.
Not always. Many people keep working past 65 and stay on an employer health plan. Whether you should enroll in Medicare, delay part of it, or do both depends on the size of the employer providing your coverage and on the type of coverage you have. Getting this decision right matters, because enrolling at the wrong time can create permanent late penalties or gaps in coverage.
Your group health plan generally pays first ("primary") and Medicare pays second. In this situation you can usually delay Medicare Part B (and Part D) while you have that active coverage, and enroll later without a late penalty using a Special Enrollment Period. Most people still enroll in Part A at 65 because it is premium-free for those who have enough work history — though see the HSA note below before you do.
Medicare usually pays first and your employer plan pays second. Because Medicare is primary, you generally should enroll in Part A and Part B at 65 even though you're still working, or you may be left with significant gaps. Check with your benefits administrator about how your specific plan coordinates with Medicare.
A common and costly misunderstanding: COBRA and retiree coverage are not considered active employer coverage for the purpose of delaying Part B. If you're relying on COBRA or a retiree plan, you typically need to enroll in Part B during your Initial Enrollment Period to avoid a late penalty. Don't assume that having any insurance is enough — it has to be coverage based on current employment.
If you contribute to a Health Savings Account (HSA), note that you cannot keep contributing once you're enrolled in any part of Medicare — including premium-free Part A. Medicare Part A enrollment can also be backdated up to six months. If you plan to keep contributing to an HSA past 65, many people stop HSA contributions about six months before they plan to enroll in Medicare. This is a tax matter as well as a coverage one, so it's worth confirming with a tax professional.
Late-enrollment penalties for Part B and Part D can last for as long as you have Medicare, so timing matters.
Before your 65th birthday, it helps to gather a few facts: how many employees your (or your spouse's) employer has, whether your drug coverage is creditable, and whether you contribute to an HSA. From there you can decide whether to enroll, delay, or take only part of Medicare. An independent broker can walk through your specific situation at no cost, and HICAP — California's State Health Insurance Assistance Program (SHIP) — can also help with free, unbiased counseling.