Medicare 2026

Medicare and Employer Health Plans for Austin Workers

AUSTIN, Texas — If you're turning 65 and still clocking in at a job with health benefits, you're far from alone. Plenty of Central Texans keep working well past their Medicare eligibility date — and the question that comes up again and again is the same: Do I have to sign up for Medicare right now, or can I wait?

The honest answer is: it depends on your employer, the size of the company, and how the two types of coverage coordinate. Getting this wrong can mean lifelong late penalties, so it's worth understanding the rules before your 65th birthday arrives.

Start with the size of your employer

The single most important factor is how many people work at your company (or your spouse's company, if you're covered through their job).

• 20 or more employees: Your group health plan generally pays first, and Medicare pays second. In most cases, you can delay Part B without a penalty and stay on the employer plan.
• Fewer than 20 employees: Medicare usually pays first, and the employer plan pays second. That means you typically need to enroll in Part A and Part B when you're first eligible — otherwise, you could be left with big gaps in coverage.

If you're not sure which category your employer falls into, ask your HR or benefits office in writing. This is a routine question, and they should be able to answer clearly.

Part A is usually a simple call

Most people qualify for premium-free Part A (hospital insurance) because they or their spouse paid Medicare taxes for at least 10 years. Since it doesn't cost anything, many workers sign up for Part A at 65 even if they keep their employer coverage.

One important exception: if you contribute to a Health Savings Account (HSA), enrolling in any part of Medicare — including Part A — means you can no longer make new HSA contributions. If you want to keep funding your HSA, you may want to delay Part A. Talk to your benefits team before you decide.

Part B is where the timing gets tricky

Part B (doctor and outpatient care) comes with a monthly premium, so many people working past 65 want to delay it. That's fine — if your employer coverage qualifies as "creditable" and the company has 20 or more employees.

When you eventually leave the job or lose the coverage, you get an 8-month Special Enrollment Period to sign up for Part B without a late penalty. Miss that window and you could pay a permanent 10% premium surcharge for every 12 months you were eligible but didn't enroll.

COBRA and retiree coverage do not count as active employer coverage for this rule. If you go on COBRA after leaving your job, your 8-month clock has already started ticking.

What about Part D and prescriptions?

If your employer plan includes drug coverage that Medicare considers "creditable," you can delay Part D without a penalty. Your plan should send you a Notice of Creditable Coverage each year — keep it in a safe place. You'll need it later to prove you weren't uninsured.

A few Part D program figures are worth knowing even if you're not enrolling yet:

• The annual out-of-pocket cap for Part D is $2,100.
• The maximum deductible is $615.
• The old "donut hole" coverage gap is gone — Part D now has three simpler phases.
• The Medicare Prescription Payment Plan lets enrollees spread drug costs across the year in monthly payments if they choose.

Higher earners: watch for IRMAA

If your income is on the higher side — which is common for people still working — you may pay an Income-Related Monthly Adjustment Amount (IRMAA) on top of your Part B and Part D premiums. For 2026, IRMAA kicks in above $109,000 for single filers (and higher thresholds for couples). Social Security uses your tax return from two years earlier to decide.

If your income has since dropped — say, because you retired or cut back hours — you can ask Social Security to reconsider.

What's available around Austin

Austin is in Travis County, where Medicare Advantage and Part D plan availability is set at the county level. When you're ready to compare options, the official plan finder at Medicare.gov shows every plan available where you live, along with each plan's Star Rating (a CMS quality score from 1 to 5).

Two enrollment windows to keep on your calendar:

• Annual Enrollment Period: October 15 – December 7 (change or join Medicare Advantage or Part D)
• Medicare Advantage Open Enrollment: January 1 – March 31 (switch or drop an Advantage plan)