Medicare 2026

Still Working at 65 in Kihei? How Medicare Fits With Job Coverage

# Still working at 65? How Medicare coordinates with employer…

KIHEI, Hawaii — Turning 65 used to mean handing in your badge and picking up a Medicare card. Today, plenty of Kihei residents are still clocking in — at resorts along South Kihei Road, in small businesses off Piʻikea Avenue, or remotely for mainland employers. If that's you, you may be wondering whether to sign up for Medicare now, wait, or somehow do both. The good news: Medicare is built to coordinate with employer coverage. The rules just depend on the size of the employer and a few key deadlines.

Who pays first depends on employer size

Medicare uses "coordination of benefits" rules to decide which insurer pays first when you have two forms of coverage. According to CMS, if your (or your spouse's) employer has 20 or more employees, the group health plan is the primary payer and Medicare is secondary. If the employer has fewer than 20 employees, Medicare typically pays first and the group plan pays second.

That distinction matters in a place like Kihei, where the local economy is a mix of large hospitality employers and smaller family-run businesses. If you work for a smaller shop, signing up for Part B at 65 is often important — because if Medicare is supposed to be primary and you don't have it, you could be left paying the share Medicare would have covered.

Part A is usually a "yes." Part B is the real decision.

Most workers sign up for Part A (hospital insurance) at 65 because they've paid enough in Medicare taxes to get it premium-free. Having Part A alongside employer coverage usually doesn't cost you anything extra.

Part B (medical insurance) is different — it carries a monthly premium. If your job-based coverage is considered "creditable" and the employer has 20 or more employees, many people delay Part B to avoid paying two premiums. If the employer is small, or if the group coverage is thin, taking Part B at 65 often makes more sense.

One important exception: if you contribute to a Health Savings Account (HSA), you can no longer add money to it once you enroll in any part of Medicare, including Part A. Some workers delay both Part A and Part B to keep contributing.

Don't miss your Special Enrollment Period

When your employer coverage eventually ends — whether you retire, cut your hours, or lose the plan — you get an 8-month Special Enrollment Period (SEP) to sign up for Part B without a late-enrollment penalty. COBRA and retiree coverage do not count as active employer coverage for this purpose, so the 8-month clock starts when the job-based coverage ends, not when COBRA runs out.

Missing that window can mean a lifetime Part B late penalty of 10% for each full 12-month period you could have had it but didn't. That's one of the costlier mistakes Medicare beginners make.

What about Part D drug coverage?

If your employer plan includes prescription drug coverage that Medicare considers "creditable," you can delay Part D without a penalty. Your plan should send you a notice each year telling you whether your drug coverage is creditable — keep those letters.

For 2026, Part D has a $2,100 annual out-of-pocket cap on covered drugs, a maximum deductible of $615, and the old "donut hole" coverage gap is gone (replaced by three simpler phases as of 2025). There's also a Medicare Prescription Payment Plan that lets you spread drug costs across the year in monthly installments instead of paying big amounts at the pharmacy counter.

Higher earners should also know about IRMAA — an income-related surcharge added to Part B and Part D premiums. For 2026, it kicks in above $109,000 in income for a single filer.

A quick Kihei snapshot

Kihei is in Maui County, where Medicare beneficiaries generally have a range of Original Medicare, Medicare Advantage, and standalone Part D options to consider once they're ready to leave employer coverage. Availability is set at the county level, not by ZIP code or town, so a neighbor in Wailea or Makawao is choosing from the same menu you are.

Two dates worth circling: the Annual Enrollment Period runs October 15 – December 7, and the Medicare Advantage Open Enrollment Period runs January 1 – March 31. Those are for people already in Medicare — not for delaying Part B while you work.

Where to get help

Coordinating Medicare with a job is one of those situations where a 15-minute conversation with the right person can prevent years of headaches. Before you make changes:

• Ask your employer's HR or benefits office whether your coverage is "creditable" and how it works with Medicare.
• Visit Medicare.gov for the official rules on enrollment periods and coordination of benefits.
• Call 1-800-MEDICARE (1-800-633-4227) with specific questions.
• Contact the Hawaii State Health Insurance Assistance Program (SHIP), sometimes called Sage PLUS, for free, unbiased one-on-one counseling.