Working Past 65 in Texas: Do You Need Medicare Yet?
If you are still working at 65 with employer coverage, whether you can delay Medicare without penalty depends almost entirely on how many people your employer has.
The 20-employee rule decides everything
If your employer has 20 or more employees, its group plan is generally primary and you can delay Part B without penalty while you remain actively employed and covered. You get a Special Enrollment Period when that coverage ends.
If your employer has fewer than 20 employees, Medicare is generally primary. Delaying Part B in that situation can leave you with large unpaid claims, because the group plan may pay only what it would have paid as secondary. This catches people at small Texas businesses regularly.
Part A is usually worth taking either way
Most people take Part A at 65 because it costs nothing if they qualify on work history. There is one significant exception: if you contribute to a Health Savings Account, enrolling in any part of Medicare ends your eligibility to contribute.
HSA contributions must stop the month Medicare begins, and Part A enrollment can be backdated up to six months when you eventually apply, which can create excess contributions retroactively. If you are contributing to an HSA past 65, this needs planning rather than a default.
COBRA and retiree coverage are not the same thing
COBRA does not count as active employer coverage for Medicare purposes. Neither does retiree coverage. If you are 65 and on COBRA, your Special Enrollment Period is generally running whether you realize it or not, and letting it lapse triggers the permanent Part B penalty.
This is one of the most expensive misunderstandings in Medicare, and it disproportionately hits people who left a job at 64 or 65 and assumed COBRA bridged them safely.
When you finally do retire
Your Special Enrollment Period gives you eight months from when employment or the group coverage ends, whichever comes first, to enroll in Part B without penalty. For Part D, the window is shorter at 63 days.
If you are a higher earner, retirement is also the moment to look at IRMAA. Your first year or two of Medicare premiums may be based on your final working years, and Form SSA-44 exists to correct that.
Ask HR one specific question
Ask whether your employer plan is considered creditable coverage for Medicare, and get the answer in writing. Verbal assurances from a benefits office are not a defense against a penalty, and the person answering may not know how the 20-employee rule applies to your situation.
Small employers are the trap in Texas
Texas has a large share of employment at businesses below the 20-employee threshold, and that is precisely where delaying Part B goes wrong. If Medicare is primary and you have not enrolled, the group plan may pay only the portion it would have paid as secondary, leaving you responsible for the rest.
People generally discover this after a large claim rather than before. If you are 65 or older and working at a small Texas business, confirming which coverage is primary is not paperwork; it is the difference between covered and not.
Working past 65: common questions
Can I keep contributing to my HSA? Not once any part of Medicare begins. Because Part A can be backdated up to six months when you apply, contributions in that lookback window can become excess retroactively. Plan the stop date deliberately.
Should I take Part A if my employer plan is good? Usually yes if you are not funding an HSA, since it is premium-free for most people and can pay secondary to the group plan.
What about my spouse's coverage? If your spouse is covered under your employer plan and you move to Medicare, their coverage may change or end. Check before you make the switch, not after.
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