Working Past 65: How Medicare Works When You’re Still on the Job in Ohio

More people around Dayton are working past 65 than ever. Some love the work. Some want a few more years of full paychecks before they touch retirement savings. Some are hanging on for the health insurance. Whatever the reason, the moment you hit 65 and you are still employed, Medicare starts sending mail, HR starts asking questions, and nobody seems to give you a straight answer.

Here is the straight answer, or at least the framework for finding yours. Because the honest truth is that working past 65 in Ohio has one right decision for you and several wrong ones, and which is which depends almost entirely on how many people work at your company.

The 20-Employee Rule Changes Everything

Start here. Everything else follows from this one question: does your employer have 20 or more employees?

If yes, your group health plan pays first and Medicare pays second. Your employer coverage stays primary, you can keep it, and you can delay Medicare Part B without any penalty for as long as you are actively working and covered. This is the situation for most people at Wright-Patterson, Premier Health, Kettering Health, Sinclair, and the larger manufacturers around the Miami Valley.

If no — fewer than 20 employees — Medicare becomes the primary payer at 65 whether you enroll or not. Your small-employer plan drops to secondary. And this is where people get hurt. We have seen retirees at small Beavercreek and Xenia businesses assume their group plan had them covered, skip Part B, and then discover their insurer had been paying only the 20 percent all along because it assumed Medicare was picking up the 80 percent. That leaves you owing the 80 percent that Medicare would have covered if you had enrolled.

So if you work for a small business, ask HR one specific question: “Does our plan pay primary or secondary once I turn 65?” Get the answer in writing. This is not a question to guess at.

Should You Take Part A at 65?

Part A covers hospital stays and, for most people who worked 40 quarters, costs nothing. Free coverage sounds like an easy yes.

Usually it is. If you are working at a large employer with a traditional group plan, enrolling in premium-free Part A at 65 gives you a small backstop — it can pick up some hospital costs your group plan does not. There is no downside.

There is exactly one exception, and it is a big one: health savings accounts. More on that below.

One wrinkle worth knowing: if you are already drawing Social Security when you turn 65, you are enrolled in Part A automatically. You cannot decline it without withdrawing your Social Security application and paying back benefits. That is a real problem for HSA contributors, which is why the timing of your Social Security claim and your Medicare decision should be made together, not separately.

Delaying Part B Without a Penalty

Part B costs money every month — the standard premium is $202.90 in 2026, and higher if your income is above the IRMAA thresholds ($109,000 single, $218,000 married filing jointly, based on your 2024 return). The 2026 Part B deductible is $283. All of these figures come straight from Medicare’s 2026 Medicare costs fact sheet, which is worth bookmarking — it is updated every December. If your employer coverage is solid and you are at a company with 20-plus employees, paying a second premium for coverage you are not using rarely makes sense.

You can delay. The protection is called a Special Enrollment Period, and it gives you eight months after your employment or your group coverage ends — whichever comes first — to sign up for Part B with no late penalty.

The details that trip people up

The coverage must come from active employment. Yours or your spouse’s. Retiree coverage does not count. COBRA does not count. If you retire in March and take COBRA for 18 months thinking you are protected, your eight-month clock started in March, not when COBRA ended. That mistake produces a permanent Part B penalty of 10 percent for every 12 months you went without — and it never goes away.

When you do enroll, you will need forms CMS-40B and CMS-L564. That second one has to be completed by your employer, so give HR some lead time. Do not start this the week your coverage ends.

The HSA Trap Nobody Warns You About

If you contribute to a health savings account, read this section twice.

Once you enroll in any part of Medicare — including free Part A — you can no longer contribute to an HSA. Not reduced contributions. None.

Worse, Part A enrollment is retroactive up to six months when you sign up after 65. So if you enroll in November, your Part A coverage may be backdated to May, and any HSA contributions you made in that window become excess contributions subject to a 6 percent penalty until you pull them out.

The practical rule: stop HSA contributions at least six months before you plan to enroll in Medicare or claim Social Security. If you turn 66 in October and want to keep contributing, your last contribution month should be March.

You can still spend HSA money after enrolling — on Part B premiums, Part D premiums, deductibles, dental, hearing aids, long-term care premiums. You just cannot add to it. Plenty of Miami Valley retirees walk into retirement with a well-funded HSA that quietly pays their Medicare premiums for years. That is a good position to be in, and it takes planning to get there.

Comparing Your Group Plan to Medicare

Employer coverage is not automatically better. Run the actual numbers.

Add up what you pay monthly for your group plan, your deductible, your out-of-pocket maximum, and what your spouse’s coverage costs if they are on your plan. Then compare it to a realistic Medicare setup: Part B premium, a Medigap Plan G premium (rates vary by carrier, age, and ZIP code — get current quotes for Greene or Montgomery County rather than relying on a rule of thumb), and a Part D plan.

A few patterns we see around Dayton:

• High-deductible group plans often lose to Medicare plus Medigap once you account for the deductible and coinsurance. A $4,000 deductible is a lot of Plan G premiums.
• Rich employer plans where the company pays most of the premium usually win, especially if you are covering a spouse who is not yet 65. Medicare covers one person. Your family plan may be carrying two or three.
• Small-employer plans almost always mean you should enroll in both A and B, since Medicare is paying primary anyway.

Also check the network. If you see doctors at Kettering Health or Premier Health and your group plan narrowed its network last year, Original Medicare with a supplement gives you far wider access — nearly any provider in the country that takes Medicare.

What Happens When You Finally Retire

The transition has more moving parts than people expect. A rough timeline:

Three months before your last day

Ask HR for form CMS-L564 and confirm the exact date your coverage ends. Sometimes it is your last day. Sometimes it is the end of that month. That date drives everything.

Two months before

Submit your Part B enrollment. You can request a specific start date so there is no gap between your group plan ending and Medicare beginning. A gap of even two weeks is a real risk at this stage of life.

One to two months before

Apply for a Medigap policy or choose a Medicare Advantage plan, and pick a Part D drug plan. The Medigap timing matters enormously: when you enroll in Part B at 65 or later, you get a six-month Medigap open enrollment window with guaranteed issue. No health questions, no denials. Miss it and Ohio carriers can medically underwrite you — and decline you outright for conditions you already have. This window is the single most valuable thing about retiring on schedule rather than improvising.

The month you retire

Confirm your Part D plan covers your prescriptions at your pharmacy. Formularies vary wildly. The plan that was cheapest for your neighbor may be expensive for you.

Mistakes We See Most Often

Assuming COBRA protects you. It does not. Not for Medicare enrollment purposes. This one costs people thousands in lifetime penalties.

Not checking the employee count. Small-employer workers who skip Part B are exposed to enormous bills.

Contributing to an HSA too close to enrollment. The six-month lookback catches people every year.

Forgetting the spouse. If your spouse is 62 and on your employer plan, your retirement ends their coverage too. They need a plan — marketplace coverage, their own employer, or something else — before you hand in your badge.

Missing the Medigap window. Six months. Guaranteed issue. Once it closes, your health history matters again.

Waiting until the last month. Social Security offices and employer HR departments both move slowly. Start early.

Getting a Second Opinion

Most of these decisions are permanent or nearly so. A missed Part B enrollment follows you for life. A closed Medigap window cannot be reopened. An HSA penalty cannot be undone after the fact.

If you are approaching 65 and still working, or planning to retire in the next year or two, it costs nothing to have someone walk through your specific situation — your employer’s size, your plan’s actual costs, your HSA, your spouse’s coverage, your prescriptions.

Medicare & Retirement Solutions Group is right here in Beavercreek, and we work with folks all over the Dayton area and Miami Valley on exactly this transition. Consultations are free, and we would rather help you get the timing right than clean up a penalty later. Give us a call or reach out through medretiregroup.com and let’s look at your numbers together.