Most people first become eligible for Medicare Parts A and B at age 65, but that doesn't mean everybody needs it at that age. If you have employer coverage at the time you reach the age of eligibility, you may not need to apply for Medicare insurance just yet.

Medicare enrollment: The short version

The age of eligibility for Medicare is 65, and some people are enrolled automatically while others need to sign up. If you're already receiving Social Security or Railroad Retirement Board (RRB) retirement benefits, you'll automatically be enrolled in Medicare Parts A and B on the first day of the month you turn 65. Automatic enrollment also applies if you've gotten Social Security or RRB disability benefits for 24 months, or if you start disability because you have ALS (Lou Gehrig's Disease).

On the other hand, if you're 65 and aren't receiving Social Security or RRB benefits yet, you'll need to sign up for Medicare. You can do this online at the Social Security Administration's website, in person at your local Social Security office, or over the phone.

A stethoscope and pen sit on top of a Medicare enrollment form

Image source: Getty Images.

Your initial enrollment period lasts for seven months and includes the month during which you turn 65, as well as the three months before and after. If you choose not to sign up during your initial enrollment period, the general enrollment period runs from January 1 to March 31 each year, but you may have to pay a penalty in the form of higher Part B premiums for enrolling late.

What if I have employer coverage? Do I still need to sign up?

The short answer is "it depends." If you're about to turn 65 and are still covered by your employer's plan (or your spouse's employer's plan), you should ask your benefits administrator if they require you to sign up.

If your employer doesn't require you to sign up at 65, you don't need to enroll in Medicare, nor will you be penalized for not signing up during your initial enrollment period. You don't have to sign up for Medicare until you retire or otherwise lose your employer's coverage. In this case, you'll have a special enrollment period that begins the month after your coverage or employment ends, whichever comes first, and lasts for eight months. As long as you sign up during your special enrollment period, you typically won't have to pay a late enrollment penalty.

However, it's important to be aware that if you retire and are allowed to stay enrolled in your former employer's plan, it's not considered employment-based coverage (after all, you're not "employed" at that point) for the purposes of obtaining a special enrollment period. You'll need to apply for Medicare within the appropriate enrollment period after terminating employment. The same rule applies if you have COBRA.

You can still have other insurance, but once you apply for Medicare, it becomes your primary health insurance. Healthcare charges will be submitted to Medicare first, and any non-covered costs can then be submitted to your other plan.

The bottom line

The bottom line is that if you have health coverage through your employer, you should figure out whether or not you need to apply for Medicare as soon as you're eligible, and proceed accordingly. The most convenient way to sign up for Medicare is online through the Social Security Administration's website. The application takes less than 10 minutes, there are no forms to sign, and there's usually no further documentation requirement.