Do You Pay IRMAA If You Are Still Working at 65? The 20-Employee Rule

The 20-employee line that decides everything

If you or your spouse are actively working and covered by a group health plan from an employer with 20 or more employees, your workplace insurance is primary and Medicare is secondary. That is the configuration that lets you delay Part B without any late penalty. When the employment or the coverage eventually ends, you get an 8-month Special Enrollment Period to sign up for Part B cleanly.

Below 20 employees, the rule flips. Medicare automatically becomes your primary insurer at 65 whether you are working or not. Enroll in Part B on schedule, because a small employer's plan can legally refuse to pay claims that Medicare should have covered first, which leaves you holding bills you assumed were covered. I have seen this described as the costliest misunderstanding in pre-Medicare planning, and I believe it: "I have good coverage at work" and "I am protected from Medicare's enrollment deadlines" are two different statements, and the second one depends on headcount, not how generous the plan feels.

Do you pay IRMAA if you are still working? The surcharge needs a premium to attach to

This is the part people overcomplicate. IRMAA-D, the Part D version, only exists if you are enrolled in a Part D plan or a Medicare Advantage plan with drug coverage. No enrollment, no surcharge, no matter how high your income is. The same logic holds for Part B: delay enrollment under the 20-employee rule and there is no Part B premium, so no IRMAA can attach to it. Your $180,000 salary is irrelevant to Medicare's billing department while you are not in the program.

Two traps to name. First, the Part D late enrollment penalty is the real risk of skipping drug coverage without creditable employer coverage: 1% of the national base beneficiary premium for every full month without coverage, and for 2026 that base premium is $38.99. It never resets. Second, delaying Part B while keeping Part D, or vice versa, is allowed; the two decisions are independent, and IRMAA follows whichever part you actually join.

What your working years cost you later

Here is the delayed bill. Your salary counts toward MAGI, and IRMAA uses a two-year lookback, so the high-earning years right before you enroll set your first Medicare premiums. Someone who works to 68 and enrolls then is paying IRMAA based on age 66 income, which was probably the peak earning year. The lookback guide maps which tax year counts when.

The escape hatch is real, though. Stopping work counts as a life-changing event, and Form SSA-44 lets you ask Social Security to use your current income instead of the two-year-old figure. If you retire mid-year, the appeal can reset your premiums to your actual retirement income instead of your final salary. Our SSA-44 walkthrough covers the qualifying events and the paperwork. And in the years before retirement, the same MAGI tactics apply to a working 64-year-old as to a retiree: the MAGI playbook works on salary plus investment income the same way.

One question I cannot answer for you: whether your employer's drug coverage is creditable. Only your plan administrator can confirm that, and they are required to do it in writing every year. If you never received that notice, ask HR for it before your 65th birthday. Everything in this article downstream of Part D depends on that one letter.

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