You don’t have to sign up for Medicare at age 65, but delaying enrollment can have serious financial consequences. If you’re still working and have employer health coverage, you can delay Medicare enrollment without penalty through a Special Enrollment Period that extends eight months after your employment or coverage ends, whichever comes first.

However, if you don’t have qualifying employer coverage and delay Part B enrollment past your Initial Enrollment Period, you’ll face a permanent late enrollment penalty of 10% for each full 12-month period you could have had Part B but didn’t sign up. This penalty is added to your monthly premium for as long as you have Medicare.

Your Initial Enrollment Period begins three months before your 65th birthday month and extends three months after, giving you seven months total to enroll. If you miss this window and don’t qualify for a Special Enrollment Period, you can only enroll during the General Enrollment Period from January 1 to March 31 each year, with coverage starting July 1.

Part A is premium-free for most people who worked and paid Medicare taxes for at least 40 quarters.