Medicare 2026

Coordinating Medicare with Employer Coverage in Phoenix

PHOENIX — Turning 65 while you're still punching the clock is more common than it used to be. Plenty of Valley workers are staying on the job well past their Medicare eligibility date, either because they love what they do, they need the paycheck, or they want to hang onto the health plan they already know.

That raises a fair question: do you have to sign up for Medicare at 65 if you already have coverage through work? The honest answer is, "it depends." Here's how the pieces fit together.

Start with the size of your employer

The rules hinge on how many people work at your company — not on how good the insurance is.

• 20 or more employees: Your employer's group health plan is the primary payer, and Medicare is secondary. You can usually delay Part B without a late penalty, as long as your coverage is considered active employer coverage (not retiree coverage or COBRA).
• Fewer than 20 employees: Medicare is generally the primary payer at 65, and your employer plan pays second. In this case, most people should enroll in Part A and Part B on time, or risk gaps and penalties.

Because Phoenix has a mix of large employers — hospitals, school districts, the city itself, big tech and aerospace — and thousands of small businesses across Maricopa County, the right answer really does vary employer by employer. When in doubt, ask your HR or benefits office in writing how your plan coordinates with Medicare.

Part A is usually a simple "yes"

Most people qualify for premium-free Part A (hospital insurance) because they or a spouse paid Medicare taxes for at least 10 years. If that's you, signing up for Part A at 65 is generally a low-risk move. It can help cover hospital costs your employer plan doesn't.

There is one big exception: if you contribute to a Health Savings Account (HSA), you can't keep making HSA contributions once you're enrolled in any part of Medicare, including Part A. If your HSA matters to you, talk to your benefits team before you enroll.

Part B is the decision that trips people up

Part B (doctor visits, outpatient care) comes with a monthly premium, so many workers with solid job-based coverage choose to delay it. That's allowed — but only if your employer coverage counts as "creditable" active coverage from an employer with 20+ workers.

If you delay Part B without qualifying coverage, you can face a late enrollment penalty that sticks with you for life — 10% added to your premium for every full 12 months you could have had it but didn't.

When you do retire or leave the job, you get a Special Enrollment Period of up to 8 months to sign up for Part B without a penalty. Don't wait until the last week — coverage gaps are the most common mistake we hear about.

Don't forget Part D — even if you take no prescriptions

Medicare's drug coverage (Part D) has its own rules. If your employer plan's drug coverage is "creditable" (at least as good as standard Medicare drug coverage), you can delay Part D without penalty. Your plan should send you a notice each year telling you whether it's creditable — keep those letters.

A few numbers worth knowing when you do move to Medicare drug coverage:

• The Part D out-of-pocket cap is $2,100 in 2026 and $2,400 in 2027.
• The maximum Part D deductible is $615 in 2026 and $700 in 2027.
• The old "donut hole" is gone — drug coverage now has three phases.
• The Medicare Prescription Payment Plan lets you spread drug costs across the year in monthly amounts if you'd rather not pay a big bill at the pharmacy counter.

What's available around Phoenix

Phoenix sits in Maricopa County, and Medicare plan choices — Medicare Advantage, stand-alone Part D, and Medigap options — are set at the county level. Maricopa is one of the largest Medicare markets in the country, so if and when you do leave your employer plan, you'll have a wide range of options to sort through. That's good news, but it also means it pays to start reading up before you need to decide.

Also keep the calendar in mind:

• Oct. 15 – Dec. 7: Medicare's Annual Enrollment Period (change Part D or Medicare Advantage for the next year).
• Jan. 1 – March 31: Medicare Advantage Open Enrollment (for people already in an Advantage plan).

A quick word on higher incomes

If your income is above $109,000 as a single filer (or $218,000 married filing jointly) in 2026, you'll pay an IRMAA surcharge on top of your Part B and Part D premiums. Social Security uses your tax return from two years back, so a big work year in your early 60s can affect your Medicare premiums later. It's not a reason to avoid Medicare — just something to plan for.