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I’ll be 65 soon but plan to keep working full-time. Is it better to keep my employer’s health insurance or to get Medicare?

Turning 65 is a major milestone, but for many, it no longer signals the end of a career. If you are among the growing number of Americans planning to work full-time past the traditional retirement age, you face a critical financial and healthcare decision: should you stick with your employer’s group health plan or transition to Medicare?

There is no “one-size-fits-all” answer. The right choice depends on the size of your company, the cost of your premiums, and your specific healthcare needs.

1. The Rule of 20: Company Size Matters

The first thing you must determine is how Medicare views your employer. This dictates which insurance pays first (the “primary payer”) and whether you can delay Medicare without penalties.

  • Large Employers (20+ Employees): If your company has 20 or more employees, your employer group health plan remains your primary coverage. You can usually delay Medicare Part B and Part D without facing a late-enrollment penalty later.

  • Small Employers (Fewer than 20 Employees): In most cases, Medicare becomes the primary payer at age 65 for small businesses. If you don’t sign up for Medicare, your employer’s insurance may refuse to pay your claims, leaving you with massive out-of-pocket costs. If you work for a small business, you almost always need to enroll in Medicare at 65.

2. Comparing Costs and Coverage

If you work for a large employer, you have the luxury of choice. To decide which is “better,” you should conduct a side-by-side comparison of three factors:

Monthly Premiums

Medicare Part A is usually free if you’ve worked for 10 years. However, Part B (medical insurance) has a standard monthly premium ($185.00 in 2026, though this adjusts annually). If you are a high earner, you may also pay an IRMAA (Income Related Monthly Adjustment Amount) surcharge. Compare this total to what you currently pay for your employer’s premium.

Deductibles and Out-of-Pocket Max

Employer plans often have a “Maximum Out-of-Pocket” limit. Original Medicare (Parts A and B) does not have a cap on out-of-pocket spending. To get that protection, you would need to purchase a Medicare Supplement (Medigap) plan or a Medicare Advantage plan, which adds to your monthly cost.

The HSA Conflict

If you have a Health Savings Account (HSA) and want to keep contributing to it, you cannot enroll in any part of Medicare. Even enrolling in “free” Part A will disqualify you from making HSA contributions. If you love the tax advantages of your HSA, you may want to delay Medicare entirely until you truly retire.

3. The “Best of Both Worlds” Approach

Many workers choose to enroll in Medicare Part A while keeping their employer coverage. Since Part A covers hospital stays and is usually premium-free, it acts as secondary insurance. It can help pick up the tab for hospital costs that your employer plan might leave behind.

However, remember the HSA rule: if you trigger Part A, your HSA contributions must stop immediately.

4. When Is Medicare the Clear Winner?

Medicare might be the better option if:

  • Your employer plan has a very high deductible.

  • You pay a significant amount to cover yourself (some employers subsidize the employee heavily but not the spouse).

  • Your employer plan has a limited network of doctors, whereas Original Medicare is accepted by the vast majority of providers nationwide.

Summary Checklist

Before you make a move, take these steps:

  1. Check with your HR department: Ask specifically how your coverage coordinates with Medicare.

  2. Analyze your “Total Cost”: Calculate (Premiums + Deductibles + Co-pays) for both paths.

  3. Check your prescriptions: Use the Medicare Plan Finder to see how your specific drugs are covered under Part D vs. your current plan.

Helpful Resources