Working past 65? Covered under your spouse’s job-based plan? You may not need Medicare Part B yet, and if you have the right kind of coverage, you can delay it without a penalty. But “the right kind of coverage” is narrower than most people think, and getting it wrong can cost you for the rest of your life. Here is how to defer Part B, how to decline it if it was added automatically, and how to sign up later without a penalty.
Quick answer
- You can delay Part B penalty-free only if you (or your spouse) are covered by a group health plan through current employment.
- COBRA, retiree coverage and ACA Marketplace plans do not qualify.
- When that coverage ends, you have an 8-month window to enroll in Part B. Miss it and the penalty starts.
- The late penalty is 10% for every full 12 months you could have had Part B, and it lasts as long as you have Part B.
Who Can Safely Defer Part B?
Most people get Part A automatically at 65 if they are drawing Social Security, and Part B comes with it. Whether you should keep Part B depends on what coverage you have today.
You can usually defer if:
- You are still working and covered by your employer’s plan, and the employer has 20 or more employees.
- You are covered by your spouse’s employer plan based on their current work, same 20-employee rule.
Do not defer if:
- Your employer has fewer than 20 employees. In that case Medicare usually pays first, and skipping Part B can leave you with big gaps.
- You are on COBRA, retiree coverage or an ACA Marketplace plan. These do not protect you from the Part B penalty, even though they feel like “real” coverage.
Not sure which bucket you are in? Medicare.gov lists which situations qualify for a Special Enrollment Period. Ask your HR department, or talk to a licensed Medicare agent before you turn 65. It is a five-minute question that can save you thousands.
How to Decline or Defer Medicare Part B
There is no single “Part B deferral form” you fill out in every case. What you do depends on where you are in the process.
If your Medicare has not started yet and you were automatically enrolled: you will get a Medicare card in the mail with instructions. Follow the instructions to decline Part B and send the card back as directed. If you keep the card, you keep Part B and you will pay the Part B premium (the standard premium is set each year, so check Medicare.gov for the current amount).
If you are not on Social Security yet: you will not be enrolled in Part B automatically. You simply do not sign up for it until you are ready.
If your Medicare has already started and you want to drop Part B: contact Social Security and submit a signed request. Coverage generally ends on the last day of the month after the month Social Security receives your request. Social Security’s number is 1-800-772-1213, or you can find a local office with their office locator (see my helpful links).
How to Sign Up Later Without a Penalty
When your job-based coverage is about to end, plan ahead. Once it ends (or you stop working, whichever comes first), you have an 8-month Special Enrollment Period to sign up for Part B.
You will need to prove you had qualifying employer coverage during the time you deferred:
- Form CMS-L564 (Request for Employment Information): your employer completes this and confirms your dates of coverage.
- Form CMS-40B (Application for Enrollment in Part B): this is the application itself.
Send both to your local Social Security office, or if you already have Part A, you can apply for Part B online. Do not wait until the last month of the window. Forms get delayed, and a missed deadline is the expensive mistake.
What Happens If You Defer the Wrong Way
If you delay Part B without qualifying coverage, you will pay a late enrollment penalty of 10% for each full 12-month period you could have had Part B but did not. It is added to your premium every month, for as long as you have Part B. There is no way to earn it back. Part B also comes with a yearly deductible, and higher earners can pay more through IRMAA.
Don’t Forget Part D and Your HSA
Two things people miss when they defer:
- Part D is separate. If you go 63 days or more without creditable prescription drug coverage after you are first eligible, a Part D late penalty can apply too. Start planning your drug coverage well before your employer plan ends.
- HSA contributions. If you contribute to a Health Savings Account, you must stop contributing once Medicare Part A starts, and Part A can be backdated up to six months when you apply after 65. Many people stop contributing about six months before they enroll.
What To Do Next
Deferring Part B is a good move for some people and an expensive mistake for others. If you want a second set of eyes on your situation, the licensed agents at Brickhouse Agency offer free, no-obligation consultations to walk you through your options and your timeline. Book your free consultation.
Frequently Asked Questions
How do I decline Medicare Part B?
If you were automatically enrolled and your Medicare has not started, follow the instructions that come with your Medicare card and send the card back as directed. If Part B has already started, contact Social Security (1-800-772-1213) and submit a signed request to end it.
Is there a Medicare Part B deferral form?
Not one form for every situation. To decline, you follow the card instructions or contact Social Security. To enroll later with no penalty, you submit Form CMS-L564 (completed by your employer) with Form CMS-40B.
Can I delay Part B if I have COBRA or an ACA plan?
No. COBRA, retiree coverage and ACA Marketplace plans do not qualify you for a penalty-free delay. Only coverage from current employment does.