Medicare vs. Employer Insurance:
Should You Enroll or Wait?

• If you have health insurance through your job or your spouse’s job, turning 65 does not automatically mean you must leave the employer plan. The first question is which coverage pays first: Medicare or the employer plan?
  • Fewer than 20 employees? Medicare generally pays first. Check whether you need Part A and Part B so the employer plan pays claims as you expect.
  • 20 or more employees? The employer plan generally pays first while the qualifying employment and group coverage continue. You may be able to delay Part B.
  • COBRA or retiree coverage? These have different Medicare enrollment rules from coverage based on current employment.
• See my web page — Medicare and other insurance: who pays first?
• Fact Sheet Medicare Decisions for Someone Nearing Age 65   Medicare.Gov
• For the detailed federal rules, see Medicare.gov — Who pays first?.
• Confirm how your particular plan pays claims with its benefits administrator.

Five Questions to Answer Before You Decide

• Whose job provides the insurance?
  • Is it your current job, your spouse’s current job, a former employer, or something else?
• How many employees does the employer have?
  • Ask whether it participates in a multiemployer plan, which can change the usual payment order.
• Who pays first?
  • Ask the benefits administrator how claims would be paid if you did not enroll in Medicare Part A or Part B.
• Is your prescription coverage creditable for Part D?
  • Ask for the plan’s written Notice of Creditable Coverage and keep it.
• Do you contribute to a Health Savings Account (HSA)?
  • Medicare enrollment can affect when you must stop making HSA contributions.

Write down the answers before cancelling coverage or deciding to delay Medicare.

If the Employer Has Fewer Than 20 Employees

For someone eligible for Medicare because of age, Medicare generally pays first when coverage comes from a current employer with fewer than 20 employees. The employer plan may pay second under its own terms. Ask whether the employer participates in a multiemployer plan, because an exception may apply.

• Ask the group plan: “If I do not enroll in Medicare Part A and Part B, exactly what will this plan pay?”
• If Medicare should have paid first, the group plan might not cover bills as you expected when you lack Medicare coverage.
• Check your enrollment dates promptly. A delay can create a gap in coverage or a Part B late enrollment penalty, depending on your circumstances.
• Before dropping the employer plan, check what would happen to a spouse or dependent who also uses it.

See my web page — How to enroll in Medicare Part A and Part B.

For the payment-order details, see Medicare.gov — Who pays first?.

If the Employer Has 20 or More Employees

If you are 65 or older and insured through your or your spouse’s current employment, the group health plan generally pays first when the employer has 20 or more employees. Medicare may pay second if you are enrolled in it.

• You may be able to delay Part B without a late enrollment penalty while qualifying employment and group coverage continue.
• Ask HR to confirm how the plan coordinates with Medicare and whether your coverage qualifies for a later Part B Special Enrollment Period.
• Compare the employer plan’s premiums, doctors, hospitals, prescriptions, deductibles and family coverage with your Medicare choices.
• If you are already receiving Social Security benefits, check whether you were automatically enrolled in Part A and Part B.

See my web page — Should you enroll in Part B or wait?

See also Medicare.gov — Working past 65.

When You Retire or Lose Employer Coverage

If you qualified to delay Part B because you had group health coverage through your or your spouse’s current employment, you generally have an eight-month Part B Special Enrollment Period after the employment or qualifying coverage ends, whichever happens first.

• Plan ahead: If you want Part B to start when the employer plan ends, begin the enrollment process before your group coverage ends.
• Already have Part A? You may need an application for Part B and proof of group coverage based on current employment, commonly provided on form CMS-L564.
• Keep records: Save documents showing your employment, your group coverage and the dates each ended.
• Check separate deadlines: Part B, Medicare Advantage and Part D enrollment do not all use the same rules.

See my web page — Part B Special Enrollment Period, forms and employer verification.

Ready to apply? See my web page — Enroll in Medicare Part A and Part B.

COBRA and Retiree Insurance:
Check the Medicare Rules

• COBRA: Choosing COBRA generally does not extend your eight-month Part B Special Enrollment Period after qualifying employment or group coverage ends. Do not wait for COBRA to expire before checking your Medicare deadline.
  • See my web page — COBRA and California Cal-COBRA.
• Retiree insurance: Coverage from a former employer is different from coverage through current employment. The retiree plan may expect Medicare to pay first and may reduce or deny what it pays if you do not have Part A and Part B.
• Before joining a separate Medicare plan: Ask the retiree plan whether that choice could change coverage for you, your spouse or your dependents.
• If you delayed Part B: Check your eligibility and deadline now.
  • See my web page — Part B Special Enrollment Period.

Prescription Coverage and Health Savings Accounts

• Part D:
  • Ask whether the employer plan’s prescription benefit is creditable, meaning Medicare considers it at least as good as standard Part D coverage. Keep the plan’s written Notice of Creditable Coverage.
  • After you become eligible for Part D, going 63 days or more without Medicare drug coverage or other creditable drug coverage can lead to a late enrollment penalty.
  • See Medicare.gov — Creditable prescription drug coverage.
• HSA:
  • Once your Medicare coverage begins, you generally cannot make new tax-favored HSA contributions. Premium-free Part A can begin retroactively when you enroll after 65, so check the dates before you or your employer continues contributing.
  • See Medicare.gov — Working past 65.

What Happens to Your Spouse or Dependents?

Your Medicare decision does not automatically settle what happens to everyone else covered by the employer plan. Ask the benefits administrator before you drop or change group coverage.

• Can your spouse or dependents remain on the employer plan if you enroll in Medicare?
  • If they say no, email us, we think that’s the wrong answer!
• Will their eligibility or premiums change if you leave the group plan?
• What will the household pay under each choice?
  • Employer-plan premiums and out-of-pocket costs.
  • Medicare Part B premiums and any additional Medicare coverage you choose.
  • Separate coverage, if needed, for a spouse or dependent.

If you are considering a Medicare Supplement after employer coverage, see my web page —

California Medicare Supplement guaranteed issue rights.

Still Working?
Ask Steve About Your Choices

• Medicare and retirement benefits are separate decisions. You can enroll in Medicare without starting Social Security retirement benefits.
  • See my web page — Enroll in Medicare Part A and Part B.
• Thinking of collecting Social Security while you continue working?
  • See my web page — How working affects Social Security retirement benefits.

For help comparing your employer plan with Medicare, email Steve Shorr. It helps to include:

• Whether coverage is through your job, your spouse’s job, COBRA or a retiree plan.
• The employer’s approximate number of employees and when coverage may end.
• Whether you already have Medicare Part A or Part B.
• Whether a spouse or dependent also uses the group plan.
• Whether you or the employer contribute to an HSA.

To send an insurance ID card, coverage letter or other document, use the secure upload link on my contact page.

Related Pages and Detailed References

My web pages

• My web page — Medicare and other insurance: who pays first?
• My web page — Enroll in Medicare Part A and Part B
• My web page — Part B Special Enrollment Period
• My web page — COBRA and California Cal-COBRA

Official Medicare references

• Medicare.gov — Who pays first?
• Medicare.gov — Working past 65
• Medicare.gov — When can I sign up for Medicare?
• Medicare & You, publication #10050

If your Employer Group Insurance has Fewer than 20 Employees

Medicare generally becomes primary when the employer has fewer than 20 employees. This is one of the most important Medicare employer coverage rules and one of the most misunderstood.

If Medicare should have been primary and you delayed Part B, your employer plan may not pay claims the way you expected.

Medicare vs Employer Group Coverage When There Are More Than 20 Employees

If you have active employer group health coverage through current employment and the employer has 20 or more employees, you may be able to delay Medicare Part B without a lifetime penalty.

COBRA and retiree coverage are treated differently from active employer coverage.

Important — Let Your Employer Know You’re Eligible for Medicare A & B

Your employer or benefits administrator may need to coordinate your group coverage with Medicare. Medicare eligibility can affect how claims are processed and which coverage pays first.   Learn More