Most HR teams are not in the business of giving Medicare advice. They should not be. But that does not mean they can affordto be unprepared when the questions start coming.
And they will come.
More workers are staying in the workforce past age 65 than at any point in recent history. About one in five Americans age 65 and older participated in the labor force in 2024, a share that has roughly doubled since the mid-1980s.1 That means a growing number of employees will reach their 65th birthday while still on the group plan, still showing up to work, and carrying questions that the employer may not be equipped to answer.
Getting this wrong is not just a personal inconvenience for the employee. Missed enrollment windows can mean permanent premium penalties. Incorrect assumptions about how Medicare and employer coverage interact can leave dependents exposed. HSA contributions handled the wrong way can trigger unexpected tax liability.
These are not abstract risks, and the brokers who understand the rules are in a strong position to help clients get ahead of them before something goes wrong.
WHY THIS COMES UP MORE OFTEN NOW
The shift in workforce demographics has been gradual enough that many employers have not adjusted their benefits support processes to match it. A decade ago, an employee turning 65 and continuing to work was the exception. Today, it is increasingly common, and the gap between how often it happens and how well employers are prepared to handle it has widened considerably.
Several factors are driving older workers to stay longer. Financial pressures, longer lifespans, greater job satisfaction among experienced workers, and the flexibility many employers now offer all play a role. The U.S. Bureau of Labor Statistics projected that more than 13 million Americans age 65 and older would be working by 2024, and that number continues to grow.2
Brokers serving small and midsized employers are especially likely to encounter this issue. These clients often lack a dedicated HR infrastructure to catch it early, which means the broker conversation at renewal or mid-year may be the only structured touchpoint where someone with real knowledge is in the room. That creates both a responsibility and an opportunity.
WHERE EMPLOYEES GET CONFUSED
The Medicare rules that apply to working adults are more nuanced than most employees realize, and the details matter in ways that can follow someone for the rest of their life.
Should I enroll in Medicare at 65?
The most common area of confusion is whether to enroll in Medicare at 65 at all.
For employees at companies with 20 or more employees, the general rule is that Medicare enrollment can be delayed without penalty as long as the employee remains covered under an employer group health plan based on active employment. When employment or that coverage ends, they have an eight-month Special Enrollment Period to sign up for Medicare Part B without facing a late enrollment penalty.3
What many employees do not realize is that COBRA, retiree coverage, and individual market plans do not qualify as the type of creditable coverage that protects this delay. Once active employment ends, the clock starts regardless of what other coverage is in place.
The Cost of Missing the Window
The Part B late enrollment penalty is both significant and permanent. For each 12-month period a person delays Part B enrollment without qualifying coverage, the penalty adds 10% to their monthly premium for as long as they have Medicare.4 Someone who delays three years past their initial eligibility window without the right coverage in place could carry that added cost for decades.
Spouse Coverage Questions
Spouses add another layer of complexity. An employee who is still working may be covering a spouse on the employer plan who is also over 65. Whether that spouse can also delay Medicare enrollment depends on the same active-employment rule, running through the working employee’s coverage rather than the spouse’s own status.
If the situation is misread, the spouse could face a separate late enrollment penalty of their own.
The HSA Trap
HSAs present a distinct issue that tends to catch people off guard.
Once an employee enrolls in any part of Medicare, including Part A, contributions to a Health Savings Account must stop. And because Part A coverage can be backdated up to six months when enrolling for premium-free benefits, employees need to stop HSA contributions at least six months before they plan to enroll.
Contributions made after Medicare begins are treated as excess contributions and may be subject to a 6% excise tax for as long as they remain in the account.4
For an employee who has been diligently building an HSA through an employer HDHP, this is a planning detail with real financial consequences that a well-informed broker can help surface at the right time.
WHY TIMING MATTERS
There is a seven-month Initial Enrollment Period centered on an employee’s 65th birthday: three months before, the birth month, and three months after. Missing that window without qualifying employer coverage protection can create consequences that are difficult and sometimes impossible to undo.
The rules are also unforgiving in ways that feel arbitrary to someone working through them for the first time. An employee who retires and assumes COBRA will protect their ability to delay Medicare may discover too late that they were mistaken. COBRA does not count as creditable coverage for this purpose.
Medicare becomes primary once active employment ends, and an insurer can claw back payments made for services that Medicare should have covered if the employee failed to enroll when required.6
None of this is designed to be intuitive, and most employees approaching 65 while still working are encountering these rules for the first time. The employer, even with good intentions, often does not have the infrastructure to help them think through these decisions before a critical window closes.
HOW EMPLOYERS CAN PROVIDE BETTER SUPPORT WITHOUT BECOMING THE ADVISOR
The goal is not to turn HR into a Medicare counseling service. The goal is to ensure employees recognize that this conversation matters, understand the issues they are facing, and have a clear path to someone qualified to help them navigate their options. Building that path for a client is one of the most meaningful and most overlooked forms of support in a group benefits relationship.
It starts with awareness and timing. Employers should have a process for identifying employees approaching age 65 and proactively flagging that a Medicare review conversation is worth having. A simple notification, ideally six to twelve months before the employee’s 65th birthday, that outlines key questions and points to trusted resources can meaningfully improve that employee’s outcome.
HR teams should also be comfortable explaining, at a high level, how the group plan interacts with Medicare, specifically whether the plan qualifies as creditable coverage that protects the ability to delay enrollment, without crossing into individualized advice about what the employee should do. That individualized guidance belongs with a licensed Medicare specialist or benefits counselor.
Brokers are uniquely positioned to serve as the connector. Helping a client establish a referral path to a Medicare specialist, building that referral into the standard process for employees turning 65, and ensuring the employer understands the basics of Medicare coordination are all forms of support that create meaningful value.
The practical components are not complex:
- A clear trigger for identifying affected employees
- A brief communication that sets expectations
- A warm handoff to a trusted resource
Done well, that process protects the employee, limits employer liability exposure, and reinforces the broker’s role as someone who sees further than plan design alone.
BOTTOM LINE
Most employers with an aging workforce already have employees working through Medicare questions on their own. The difference is often whether anyone helped them think about those questions before the deadline arrived. Raising this topic with clients is not a distraction from the benefits conversation. It is an extension of it. An employee who faces a permanent premium penalty, a gap in dependent coverage, or an unexpected HSA tax liability because the issue was never surfaced will remember that experience. So will the employer.
Your clients have employees working through these questions right now. The CRC Benefits Individual and Senior team is ready to help.
CONTRIBUTORS
Felicia Atwell is a Benefits Sales Executive for CRC Benefits with a specialized background in group benefits, individual health, Medicare, and senior market solutions. Her experience on both the employer-sponsored and individual coverage sides of the industry gives her a unique perspective on the challenges employees face as they approach retirement age while still actively employed.
ENDNOTES
- U.S. Bureau of Labor Statistics. “Older Workers: Labor Force Trends and Career Options.” May 2025. https://www.bls.gov/careeroutlook/2017/article/older-workers.htm
- U.S. Bureau of Labor Statistics. “Employment Projections: 2022-2032.” September 2023. https://www.bls.gov/news.release/ecopro.toc.htm
- Centers for Medicare and Medicaid Services. “Medicare and You 2026.” 2026. https://www.medicare.gov/medicare-and-you
- IRS. “Publication 969: Health Savings Accounts and Other Tax-Favored Health Plans.” 2025. https://www.irs.gov/pub/irs-pdf/p969.pdf
- Centers for Medicare and Medicaid Services. “Medicare Secondary Payer.” 2025. https://www.cms.gov/medicare/coordination-benefits-recovery/overview/secondary-payer