Some of your employees may be approaching age 65 while still working, the big question is: when should they enroll in Medicare? The answer isn’t always straightforward, especially if you’re still receiving employer-sponsored health benefits.
In California, where many people continue working beyond traditional retirement age, understanding how Medicare enrollment works with your California insurance plans is essential for staying compliant, avoiding penalties, and maximizing benefits.
In this blog, we’ll walk you through how to time Medicare enrollment while maintaining CA employee coverage, what small businesses need to know to stay in California compliance, and how insurance brokers can help employees transition smoothly.
A Summary of Medicare & Employer Coverage
Medicare is a federal health insurance program for individuals aged 65 and older, as well as certain younger individuals with disabilities. It consists of four parts:
- Part A: Hospital insurance (usually premium-free)
- Part B: Outpatient and doctor services (monthly premium)
- Part C: Medicare Advantage (optional private plans)
- Part D: Prescription drug coverage
When you’re still working and covered under a group health plan, especially one from a small to mid-sized employer, deciding when to enroll in Medicare becomes a balancing act.
Key Medicare Enrollment Periods to Know
| Enrollment Period | When It Happens | Why It Matters |
| Initial Enrollment Period (IEP) | 3 months before, the month of, and 3 months after turning 65 | First opportunity to enroll in Medicare Parts A & B |
| Special Enrollment Period (SEP) | Anytime while actively covered by a group plan through current employment | Avoids late enrollment penalties for Part B |
| General Enrollment Period (GEP) | Jan 1–Mar 31 each year if you missed IEP/SEP | Coverage starts July 1; may come with penalties |
Failing to enroll on time can result in permanent penalties for Medicare Part B and Part D, so timing is critical.
Primary or Secondary California Insurance Plans
Whether Medicare or your employer coverage is primary (pays first) depends on the size of the employer:
- 20 or more employees: Employer plan is primary, Medicare is secondary
- Fewer than 20 employees: Medicare is primary, employer plan is secondary
If you’re covered by a California insurance plan through a small business with fewer than 20 employees, you must enroll in Medicare when first eligible—even if you’re still working. Otherwise, you risk gaps in coverage and out-of-pocket expenses.
HSA-Compatible Plans
If you’re enrolled in an HSA-compatible high-deductible health plan (HDHP), you’ll want to be extra careful about timing your Medicare enrollment.
- Once you enroll in Medicare Part A and/or B, you can no longer contribute to a Health Savings Account (HSA)
- Retroactive Part A enrollment can go back up to six months, potentially disqualifying your HSA contributions for that period
- To avoid IRS penalties, stop HSA contributions at least six months before enrolling in Medicare
HSA and Medicare Timing Guide
| Scenario | HSA Contribution Allowed? | Action Needed |
| Still working, not enrolled in Medicare | Yes | Can contribute to HSA |
| Enrolled in Medicare Part A or B | No | Stop contributions before enrollment |
| Planning to retire in 6 months | No (once enrolled) | Stop HSA contributions 6 months prior |
For more guidance, visit IRS.gov – HSA Rules
What CA Employers and Employees Need to Know
California compliance adds another layer to timing Medicare correctly. California mandates that residents have minimum essential coverage (MEC) or pay a state penalty. Medicare Part A alone counts as MEC—but Part B does not.
Employers should:
- Educate older employees on Medicare timelines
- Review whether their California insurance plans are primary or secondary
- Avoid auto-terminating coverage at age 65 without confirming Medicare enrollment
Employees should:
- Check their employer’s size and plan type
- Speak to HR or a licensed insurance broker for personalized advice
- Be aware that COBRA coverage doesn’t delay the need to enroll in Medicare
The Role of Insurance Brokers in Medicare
Trying to time Medicare enrollment alongside group coverage is complex. That’s where insurance brokers come in.
A broker can:
- Review your current California insurance plans and determine Medicare coordination rules
- Help compare group coverage vs. Medicare Advantage or Medigap plans
- Guide employees through HSA-related tax consequences
- Ensure all actions meet California compliance and federal standards
Working with a broker ensures no one is left in the dark—and no one ends up with coverage gaps or costly penalties.
Top Mistakes to Avoid
- Assuming you don’t need Medicare if you’re working: You might need it if your employer has fewer than 20 employees.
- Failing to stop HSA contributions in time: This can result in tax penalties.
- Enrolling too late: Missing your SEP can lead to lifetime penalties.
- Dropping employer coverage too soon: Especially if Medicare doesn’t fully replace it.
Plan Ahead, Stay Covered
Timing your Medicare enrollment with employer coverage can be a compliance and cost-saving move. If you’re a business owner planning for your team or an employee approaching 65, making the right choices ensures uninterrupted coverage, lower costs, and better peace of mind.
At Regency West Insurance, we help California businesses and employees navigate Medicare enrollment, CA employee coverage, HSA compatibility, and everything in between. We’re your go-to partner for benefits planning that’s smart, compliant, and people-first.
Schedule a Medicare-friendly benefits consultation with Regency West Insurance today.
Frequently Asked Questions (FAQs)
1. How do I enroll in Medicare for the first time?
You can enroll in Medicare by visiting Medicare.gov or by contacting the Social Security Administration (SSA). If you’re turning 65 and already receiving Social Security benefits, you’ll be automatically enrolled in Medicare Part A and Part B. If you’re still working and not receiving Social Security, you’ll need to actively sign up during your Initial Enrollment Period (IEP)—which spans seven months (three months before your 65th birthday, the month of, and three months after).
If you’re delaying Medicare because of CA employee coverage through a qualifying group plan, you may later use a Special Enrollment Period (SEP) to enroll without penalty. Timing your enrollment is key to ensuring California compliance and maintaining uninterrupted health coverage.
2. What documents do I need to apply for Medicare online?
To apply for Medicare online through the SSA, you’ll typically need:
- Your Social Security number
- Proof of U.S. citizenship (e.g., birth certificate or passport) or legal residency
- Current health insurance details if you have employer-sponsored California insurance plans
- Your employment history (especially if you’re delaying enrollment due to active group coverage)
- Banking information if you want Medicare premiums auto-deducted
The process is secure and usually takes less than 15 minutes online, but accuracy is important—especially if you’re also navigating HSA-compatible plans or coordinating with group benefits.
3. Who can help me enroll in Medicare plans?
You don’t have to figure it all out alone. Several professionals and organizations can help:
- Insurance brokers: A licensed broker can explain how Medicare works alongside your current California insurance plan and help choose the right Medicare Advantage or Supplement plan if needed.
- Social Security Administration: The SSA provides enrollment assistance by phone or in person.
- State Health Insurance Assistance Programs (SHIPs): These offer free, unbiased help with Medicare in your area.
- HR representatives: Your company’s HR or benefits team can provide documentation and insight into how your employer coverage interacts with Medicare.
For group plan coordination and timing, working with a knowledgeable insurance broker—like Regency West Insurance—ensures you meet all California compliance standards.
4. What are the most common mistakes for Medicare?
Here are the most common Medicare enrollment mistakes:
- Missing your enrollment window, leading to lifetime late penalties for Part B or Part D
- Failing to stop HSA contributions before enrolling in Part A, resulting in IRS penalties
- Assuming you don’t need Medicare because you’re still working (especially if your employer has fewer than 20 employees)
- Not coordinating group coverage and Medicare properly, which can lead to denied claims
- Relying on COBRA or retiree insurance to delay Medicare—these don’t count as creditable coverage under SEP rules
Avoiding these mistakes is easier with proactive planning and the guidance of a trusted insurance broker.
5. What is the most likely explanation for the expected rise in Medicare enrollment?
The most significant driver of Medicare’s growth is the aging Baby Boomer generation. Roughly 10,000 people turn 65 every day in the U.S., and many are choosing to work longer, especially in states like California. This shift has increased demand for guidance on integrating Medicare with employee health plans and group benefits.
Additionally, improved awareness of Medicare’s benefits—and rising healthcare costs for seniors—make it a more attractive and necessary option. This makes it even more important for businesses to align their California insurance plans with Medicare timelines to support their aging workforce.