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Imagine getting a note like this:
“I’m 67 and never signed up for Medicare Part B. I didn’t need it. I’m covered by my wife’s health plan at work. Now she’s retiring at the end of December, and her HR department says we can keep the same insurance through COBRA. That buys us some time, right?”
Let’s call him Rick. He’s not a real reader; he’s a hypothetical. But his plan has a trap in it.
I’ve been a CPA since 1981, and this is one of the costliest Medicare mistakes I know of, because the penalty usually lasts as long as you have Part B.
Here’s how it works. If you’re 65 or older and covered by a group health plan based on your or your spouse’s current employment, Social Security says you can generally delay Part B.
When that job or that coverage ends, whichever comes first, an eight-month window opens to sign up without a penalty. (1)
COBRA doesn’t count. Social Security says COBRA and retiree health plans “aren’t considered coverage based on current employment.” (1) North Carolina’s state Medicare counseling program puts it bluntly: You’re “not entitled to a Medicare Part B special enrollment period when COBRA coverage ends.” (2)
Miss the window, and Medicare.gov says you’ll pay an extra 10% for each year you could have signed up for Part B but didn’t, usually for as long as you have Part B. (3) The standard Part B premium is $202.90 a month in 2026. (4)
Here are five moves Rick, or anyone in his shoes, should make now.
1. Circle the date her job ends
Her last day of work, not the end of COBRA, is what starts Rick’s eight-month clock. (1)
If she retires Dec. 31, the window runs from January through August. That sounds like plenty of time. It isn’t, if you spend it assuming COBRA has you covered.
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2. Don’t let COBRA lull you to sleep
COBRA isn’t useless. But it doesn’t stop the clock. (1) If Rick lets the eight-month window pass while he’s on COBRA, the North Carolina guide warns he may have to pay a late penalty, and his coverage will be delayed. (2)
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3. Do the penalty math
Medicare.gov’s own example: Wait two full years without a Special Enrollment Period, and you pay a 20% late enrollment penalty. (3)
Applied to the 2026 standard premium of $202.90, a 20% penalty is about $40.58 a month, or roughly $487 a year. (3) (4) And it’s usually a lifetime penalty. (3)
Over a 20-year retirement, that adds up to about $9,700 at today’s premium, for nothing.
4. Mind the Medigap window, too
Here’s a second clock that’s easy to miss. Under federal law, you get a six-month Medigap Open Enrollment Period that starts the first month you have Part B and are 65 or older. (5)
During those six months, an insurance company can’t refuse to sell you any of the medical policies it offers. After that, Medicare.gov says, “you may not be able to buy a Medigap policy, or it may cost more.” (5)
So once Rick’s Part B start date is set, he should shop for supplemental coverage right away. A site like Healthcare.com can help you compare Medicare Supplement options.
PLEASE NOTE: Medicare Supplement insurance is available to those age 65 and older enrolled in Medicare Parts A and B and, in some states, to those under age 65 eligible for Medicare due to disability or End-Stage Renal disease. The purpose of this communication is the solicitation of insurance. Contact will be made by an insurance agent/producer or insurance company. Medicare Supplement insurance plans are not connected with or endorsed by the U.S. government or the federal Medicare program. Medicare Supplement plans may require underwriting and enrollment is not guaranteed.
5. Sign up before her last day
Social Security says the Special Enrollment Period also covers any month you remain on the group plan while the job it’s based on continues. (1)
So Rick doesn’t have to wait for January. He can sign up while his wife is still working instead of racing a deadline later. If anything’s unclear, her HR or personnel office is the place to start. (1)
Bottom line
Rick did nothing wrong by skipping Part B while his wife worked. The rules allow it.
The mistake would be treating COBRA as a pause button. It isn’t. The clock starts the month after her job or her coverage ends, whichever comes first.
Put the date on the calendar, sign up early, and then shop for a Medigap policy while every insurer still has to take you. That’s three steps. Missing the window can cost you every month, usually for as long as you have Part B.
Sources: 1. Social Security Administration; 2. North Carolina Department of Insurance (SHIIP); 3. Medicare.gov; 4. Centers for Medicare & Medicaid Services; 5. Medicare.gov
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