Alyssa Lane
If you have employer insurance and are eligible for Medicare, you can have both at the same time. Medicare works with current employer coverage in different ways depending on the size of the employer. For those eligible for Medicare due to age, their employer-based insurance from current employment will pay first if the employer has more than 20 employees. If the employer has fewer than 20 employees, Medicare pays first. When you stop working or lose your health insurance, you have a Special Enrollment Period (SEP) of eight months to enroll in Medicare Part A and B. During this time, you can also add Part B to existing Part A coverage.
| Characteristics | Values |
|---|---|
| Can I have Medicare and employer insurance at the same time? | Yes |
| Who is the "primary payer"? | The "primary payer" pays up to the limits of its coverage, then sends the rest of the balance to the "secondary payer". If the "secondary payer" doesn't cover the remaining balance, you may be responsible for the rest of the costs. |
| When do I need to sign up for Medicare? | You can delay signing up for Medicare Part A and/or Part B if you have employer insurance when you become eligible for Medicare. However, if your employer has fewer than 20 employees, you must sign up for Medicare when you're eligible or you may face a late enrollment penalty for Part B when you sign up later. |
| What is the "Special Enrollment Period" (SEP)? | You will have an SEP to enroll in Medicare at any point while covered by the employer plan or up to eight months after the first month you are without that employer coverage. |
| What is the coordination of benefits? | The process in place to determine which insurance will be considered the primary payer. |
| Can I drop my employer's health insurance for Medicare? | Yes, you can drop your employer's health plan for Medicare if you have employer coverage. |
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What You'll Learn
- Medicare and employer insurance can be held simultaneously
- Medicare is the primary payer for companies with fewer than 20 employees
- Medicare is the secondary payer for companies with more than 20 employees
- You can delay Medicare enrolment if you have creditable coverage
- You can decline Medicare and keep your employer's health plan
Medicare and employer insurance can be held simultaneously
If you are still working and have employer insurance when you become eligible for Medicare, you have the option to delay enrolling in Medicare Part B without incurring penalties. You can do this as long as your employer insurance qualifies as "creditable coverage", meaning it provides benefits that are at least as good as those offered by Medicare. If your employer has fewer than 20 employees, Medicare becomes the primary payer and your employer coverage pays second. If your employer has more than 20 employees, Medicare will pay secondary to your group coverage.
If you decide to enrol in Medicare Part A and/or Part B while keeping your employer coverage, there is a process in place to determine which insurance will be considered the primary payer. If your employer coverage is determined to be your primary insurer, it pays your healthcare costs first, and Medicare then covers a certain amount of the remaining Medicare-approved expenses.
If you decide to delay enrolling in Medicare, you will have a Special Enrollment Period (SEP) to enrol in Medicare at any point while covered by the employer plan or up to eight months after the first month you are without that employer coverage. To avoid gaps in coverage, it is often wise to sign up in the month before your employer coverage ends.
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Medicare is the primary payer for companies with fewer than 20 employees
Medicare is designed to work alongside employer benefits to cover your healthcare needs and help pay for most, if not all, of your medical expenses. If you have employer insurance and are eligible for Medicare, you may be able to keep your employer insurance and enroll in Medicare Part A and/or Part B to get additional health coverage. In this case, there is a process called ""coordination of benefits"" to determine which insurance will be the primary payer.
The number of employees in a company determines whether a plan is primary or secondary. Medicare is the primary payer for companies with fewer than 20 employees, and the government considers Medicare the employee's primary insurance. In this case, the employer-provided insurance is secondary coverage. If you work for a company with fewer than 20 employees, you must sign up for Medicare when you're eligible, or you may face a late enrollment penalty for Part B when you sign up later. Your employer may be able to subsidize the cost of your Medicare Part B.
If your company has 20 or more employees, you can delay signing up for Medicare without incurring late enrollment penalties. In this case, your employer insurance is the primary payer, and you can choose to keep your employer insurance and apply for Medicare later. If you decide to enroll in Medicare while keeping your employer coverage, Medicare will cover a certain amount of the remaining Medicare-approved expenses after your primary insurance has paid out.
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Medicare is the secondary payer for companies with more than 20 employees
If you have Medicare and other health insurance, such as employer insurance, each type of coverage is called a "payer". The "primary payer" pays up to the limits of its coverage, and the "secondary payer" covers the remaining balance. This order of payment is called "coordination of benefits".
If you are aged 65 or older and covered by a Group Health Plan (GHP) through current employment, and your employer has 20 or more employees, the GHP pays primary, and Medicare pays secondary. This means that Medicare is the secondary payer for companies with more than 20 employees.
If you are still working and have employer insurance when you become eligible for Medicare, you can delay enrolling in Medicare Part B without incurring penalties. This is as long as your employer insurance qualifies as "creditable coverage", meaning it provides benefits that are at least as good as those offered by Medicare. Once you retire or lose your employer coverage, you can enroll in Medicare Part B during a Special Enrollment Period (SEP) without facing late enrollment penalties.
It is important to note that Medicare does not pay out for services received by dependents or spouses, even if the original group health plan does. Medicare only applies to the employee.
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You can delay Medicare enrolment if you have creditable coverage
If you have employer insurance, you can delay Medicare enrolment if you have creditable coverage. This means that if you're still working and have employer insurance when you become eligible for Medicare, you can choose to keep your employer insurance and delay signing up for Medicare Part B without facing any late-enrollment penalties. To be considered "creditable coverage", your employer insurance must provide benefits that are at least as good as those offered by Medicare.
It is important to note that this option is only available if your employer has 20 or more employees. If your employer has fewer than 20 employees, you must sign up for Medicare when you become eligible to avoid a late-enrollment penalty for Part B.
Once you retire or lose your employer coverage, you will have a Special Enrollment Period (SEP) to enroll in Medicare Part B without incurring any penalties. This SEP typically lasts for eight months after your employment or coverage ends. It is important to coordinate the timing of your Medicare Part B enrolment with the end of your employer coverage to ensure that you have uninterrupted healthcare benefits.
During this period of delayed Medicare enrolment, your employer insurance will be considered the primary payer. This means that it will pay for your healthcare costs first, and Medicare will cover a certain amount of the remaining Medicare-approved expenses. This coordination of benefits ensures that your healthcare needs are covered by both your employer insurance and Medicare.
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You can decline Medicare and keep your employer's health plan
If you are still working and have employer insurance when you become eligible for Medicare, you have the option to delay enrolling in Medicare without incurring penalties. This is because Medicare is meant to work with employer benefits to cover your healthcare needs and help pay for most, if not all, of your medical expenses.
If you have insurance from your current employer when you become eligible for Medicare, you may think about delaying Medicare enrollment. This is because, in most cases, the size of the company you work for determines whether you'll face penalties for not enrolling in Medicare when you're eligible. If your employer has fewer than 20 employees, you must sign up for Medicare when you're eligible or you may face a late enrollment penalty for Part B when you sign up later. However, if your employer has 20 or more employees, you can delay signing up without any late enrollment penalties in the future.
If you decide to decline Medicare and keep your employer's health plan, you can always choose to enroll in Medicare at a later time through a Special Enrollment Period (SEP) without facing a late-enrollment penalty. This SEP typically lasts for eight months after your employment or coverage ends. To avoid gaps in coverage, it is often wise to sign up in the month before your employer coverage ends.
If you decide to forego Medicare altogether, you must withdraw completely from any Social Security or Railroad Retirement Board (RRB) benefits you receive. You will also be required to repay any benefits you received until your withdrawal.
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Frequently asked questions
Yes, you can have both Medicare and employer insurance simultaneously. Medicare is intended to work with employer benefits to cover your healthcare needs and help pay for most, if not all, of your medical expenses.
If you are still working and have employer insurance when you become eligible for Medicare, you can delay enrolling in Medicare Part B without incurring penalties. This is because Medicare Part B requires seniors to pay a premium. However, once you retire or lose your employer coverage, you can enroll in Medicare Part B during a Special Enrollment Period (SEP) without facing late enrollment penalties. This SEP typically lasts for eight months after your employment or coverage ends.
If your employer has fewer than 20 employees, you must sign up for Medicare when you're eligible, or you may face a late enrollment penalty for Part B when you sign up later. If your employer has 20 or more employees, you can delay signing up without any late enrollment penalties in the future.
If you have Medicare and employer insurance, each type of coverage is called a "payer." The "primary payer" pays up to the limits of its coverage, then sends the rest of the balance to the "secondary payer." If the "secondary payer" doesn't cover the remaining balance, you may be responsible for the remaining costs. Whether Medicare or your employer insurance is the primary payer depends on the size of your employer. If your employer has fewer than 20 employees, Medicare is the primary payer, and your employer coverage pays second. If your employer has more than 20 employees, Medicare pays secondary to your group coverage.
