Rules for enrolling in Medicare when self-employed are confusing

on Apr 24, 2025

Dear Toni:

I am self-employed with an individual health plan and confused about enrolling in Medicare when I turn 65 in July. I cannot find the answer to my situation in the Medicare & You handbook. A business associate who is also self-employed delayed his Part B because he is under his wife’s company benefits. He is sure that I can delay enrolling in Medicare since I am covered by a health insurance plan.

Can you please explain the difference, if there is one, between my situation and my friend’s? I do not want to make a Medicare mistake. Thanks, Toni.

--Greg from Corpus Christi, Texas

Hi Greg:

This is a great Medicare question, because Americans who are turning 65 are being bombarded by telemarketers who confuse the “turning 65” Medicare rules.

Recently, I consulted with a 66-year-old gentleman who was also self-employed like you, Greg, and was given wrong information about delaying his Medicare Part B. He was surprised to find out that Medicare does not recognize individual plans as “true employer” benefits to delay Part B. Qualifying group benefits are defined in the Medicare & You handbook as companies with 20+ employees.

The information regarding health insurance is found on page 20 of the 2025 Medicare & You handbook under “Health Insurance Marketplace.” It states that “you should sign up for Medicare when you’re first eligible to avoid the risk of a delay in Medicare coverage and the possibility of a Medicare late enrollment penalty.”

This gentleman is 66 and will receive not just a 10% penalty due to not enrolling in Part B during his Initial Enrollment Period – his penalty will be 20% (2 years, 65 and 66) each month for the rest of his Medicare life. The 20% penalty usually goes up as the Part B premium usually goes up every Jan.1.

Greg, I would recommend that you enroll in Medicare during your “Initial Enrollment Period,” which begins 3 months before July, so that your Medicare begins July 1. You currently have an individual health insurance plan, not “true group” health insurance, which can cause you to receive a Medicare penalty if you do not enroll in Medicare at the right time. Go online to www.ssa.gov/medicare/signup to apply for Medicare within the 3-month period before turning 65 or up to 90 days after.

Many Americans believe that Medicare is automatic when turning 65. This is correct if you are receiving your Social Security check when turning 65. Not working full-time with “true employer” benefits is what Social Security (the government agency that enrolls those applying for Medicare) searches for when administering the 10% per year or 12-month period for a Medicare Part B penalty.

Your business associate, who is covered under his working spouse’s “true employer” benefits, can delay enrolling in Medicare. He must follow Medicare’s enrollment rules as Social Security deems upon losing those benefits.

“Still working” are magic words when it comes to enrolling past 65 due to losing your or your spouse’s employer benefits. The Medicare & You handbook discusses on page 19 under the subtitle, “I have other health coverage. Should I get Part B?” about delaying Medicare Part B when you are leaving employer benefits. The handbook states on page 18 under “Special Enrollment Period” that one can sign up for Part B anytime during the 8-month period that begins the month after the employment ends or the coverage ends, whichever happens first.

During a Toni Says Medicare consultation, we recommend that your and/or your spouse’s Medicare Parts A and B begin the first day that the employer health plan is ending, to be sure there is medical coverage when a medical need occurs.

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Toni King is an author and columnist on Medicare and health insurance issues. She has spent nearly 30 years as a top sales leader in the field. If you have a Medicare question, email info@tonisays.com or call 832-519-8664. The “Medicare Survival Guide Advanced” edition and her new “Confused about Medicare” video series are available at www.tonisays.com.s