How does Medicare work with employer insurance?


As more baby boomers are accustomed to working past the age of 65, they continue to enjoy employer benefits. However, it is important to understand how Medicare aligns with your current employer's insurance plan to inform your decision when you become eligible to enroll for Medicare. It is important to note that “Current employer insurance” refers to insurance from either you or your spouse’s job.

The first consideration is whether Medicare will be paying primary or secondary to your current employer insurance. The organization that pays first is the primary payer. When deciding whether Medicare will serve as a primary or secondary payer, keep in mind that this depends on the size of your organization. As a rule of thumb, if your workplace staff has less than 20 employees, then Medicare should work as your primary payer. This is called the small group health plan. On the other hand, if your employer provides coverage for more than 20 employees, Medicare should work as a secondary payer. This is called the Group Health Plan (GHP).


Individuals with large group health insurance from a large employer can use their group health insurance as a primary payer and make Medicare the secondary payer. If Medicare is the secondary payer, it will refund based on what your employer paid, the benefits in Medicare, and what the provider or doctor charged. You’ll then have to pay the remainder. Also, individuals in this category may sign up in Medicare Part A, and enjoy zero-cost benefits after working for a minimum of 10 years.

If the recipient’s group health insurance deductible is higher than the deductible linked with Medicare Part A, then they can save funds spent using Medicare Part A benefits significantly.


People who have been at a company bankrolling less than 20 employees are covered under Medicare’s primary insurance coverage. This implies that the GHP would suffice as secondary insurance coverage. It is essential for you to know it is illegal for your employers to impugn Medicare coverage on you.


You may want to consider delaying Medicare enrollment if you have insurance from you or your spouse’s current employer when you qualify for Medicare. If you have an employer-sponsored plan, regardless of the employer’s size, you can put your Medicare enrollment on hold without attracting Part B penalty. You will have a Special Enrollment Period (SEP) to enlist in Medicare while under employer coverage.

Tagged: Medicare, Insurance, Employer Insurance, Group Insurance, Medicare Part B, Delayed Enrollment

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