Miss Your 8-Month Window After Work Ends, and the Part B Penalty Never Stops

A worker leaves her employer in September 2025, elects COBRA to keep her doctors, and figures she will sign up for Medicare when COBRA runs out 18 months later. That can be an expensive mistake. Once she becomes Medicare-eligible, COBRA is not treated the same as coverage based on current employment. Waiting for COBRA to end can mean a gap in Part B coverage and a late-enrollment penalty that follows her for as long as she has Medicare.

The key distinction is active employment. Coverage through your own current job or a spouse’s current job can preserve a Part B Special Enrollment Period. COBRA, retiree coverage, and severance health benefits usually do not. The deadline should be counted from the end of active employment or the end of the employer group health plan, whichever comes first, not from the date COBRA ends.

The rule almost everyone gets wrong

The 8-month Special Enrollment Period begins the month after active employment ends, or the month after employer group health plan coverage based on that employment ends, whichever comes first. Active employment ends when the job ends, even if COBRA, retiree coverage, or severance health benefits continue afterward. The clock can start while the insurance card still works.

Medicare.gov states the rule plainly: you have up to 8 months after you stop working, or after losing health insurance if that happens first, to sign up for Part B without a penalty, whether or not you choose COBRA. Miss that window, and you may have to use the General Enrollment Period from January 1 through March 31, with coverage starting the month after you sign up and a late-enrollment penalty that can last for as long as you have Part B.

What the penalty actually costs

The Part B late-enrollment penalty is 10% of the standard premium for each full 12-month period you were eligible for Part B but did not sign up. In most cases, it lasts for as long as you have Part B, and it rides on top of a premium that can rise over time.

The 2026 standard Part B premium is $202.90 per month, up from $185.00 in 2025. Applied to the 2026 base premium, the penalty looks like this:

• One-year delay (10% surcharge): $20.29 extra per month, about $243 a year.
• Two-year delay (20% surcharge): about $487 a year.
• Three-year delay (30% surcharge): $60.87 extra per month, roughly $730 a year.

Those figures can understate the lifetime hit because the surcharge is a percentage, not a fixed dollar amount. The Part B premium rose from $185.00 in 2025 to $202.90 in 2026. If the standard premium later reached $250, a 30% penalty would be $75 a month instead of $60.87. The longer the penalty lasts, the more future premium increases matter.

The Part A deductible piece nobody mentions

While you are waiting for Part B, you may also be without Medicare outpatient coverage. One emergency-room visit treated as observation status can leave you exposed to outpatient and physician bills that Part B would otherwise help cover. In 2026, Part B has a $283 deductible, and after the deductible, beneficiaries generally owe 20% of the Medicare-approved amount for covered Part B services. Original Medicare has no annual out-of-pocket maximum. The penalty is the visible cost; the coverage gap is the invisible one.

What to do this week

1. Count the months from the day active employment ended, not from the day COBRA ends. If that number is less than eight, file CMS Form CMS-40B and Form CMS-L564 (employer verification) immediately. The SEP still protects you.
2. If the 8-month window has already closed, request equitable relief from the Social Security Administration before waiting for the January General Enrollment Period. Equitable relief can waive the penalty if you can show you were misinformed by a federal employee, an employer, or a health plan representative about when to enroll. Written evidence, an email or a benefits handbook, is what moves these requests.
3. Do not repeat the mistake with Part D. The Part D late enrollment penalty runs 1% of the national base beneficiary premium per uncovered month, also permanent. If you enroll in Part B late, enroll in a Part D plan or a Medicare Advantage plan with drug coverage in the same filing.

Sources: Centers for Medicare & Medicaid Services, “2026 Medicare Parts A & B Premiums and Deductibles” fact sheet; Medicare.gov enrollment and COBRA guidance; Social Security Administration COLA announcement for 2026. Figures reflect the 2026 plan year.

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