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Medicare and Employer-based Coverage

Medicare and Employer-based Coverage

What is the difference between primary and secondary coverage?

When you have Medicare and another type of insurance, Medicare will either pay primary or secondary
for your medical costs. Primary insurance pays first for your medical bills. Secondary insurance pays
after your primary insurance. Usually, secondary insurance pays some or all of the costs left after your
primary insurance has paid (for example, deductibles and copays).

Who pays primary and who pays secondary?

Part D (prescription drug coverage)

How does Medicare work with job-based insurance?

Job-based insurance is coverage you have from your, your spouse’s, or sometimes your family member’s current work.

If you are eligible for Medicare because you are 65 or older:

  • Job-based insurance is primary if it is from an employer with 20+ employees. Medicare is secondary
  • Job-based insurance is secondary if it is from an employer with fewer than 20 employees. Medicare is primary.

If you are eligible for Medicare because you’ve collected Social Security Disability Insurance (SSDI) for 24 months:

  • Job-based insurance is primary if it is from an employer with 100+ employees. Medicare is
    secondary.
  • Job-based insurance is secondary if it is from an employer with fewer than 100 employees. Medicare is primary.

If your job-based insurance will be primary, you may decide to delay Medicare enrollment because
you already have primary coverage and do not want to pay the additional monthly Part B premium. If
your job-based insurance will be secondary, you should enroll in Medicare Part B when you’re eligible
to avoid high costs for your care. If Medicare is supposed to be your primary coverage, your job-based
coverage may provide little or no coverage if you are not enrolled in Medicare Part B.

How does Medicare work with job-based insurance?

Retiree insurance is a form of health coverage an employer may provide to former employees. Retiree coverage is almost always secondary to Medicare. This means you need to enroll in Medicare to be fully covered.

COBRA is a federal law that extends the option to purchase coverage to employees and their spouses/dependents once the employee leaves their job or otherwise loses coverage. If you have COBRA when you become Medicare-eligible, COBRA coverage usually ends the date you get Medicare. You should enroll in Part B right away. If you have Medicare Part A or Part B when you become eligible for COBRA, you must still be allowed to enroll in COBRA. Medicare is primary insurance, and COBRA is secondary insurance.

This content was created and copyrighted by the Medicare Rights Center ©2020. Medicare Rights Center is a national, nonprofit consumer service organization that works to ensure access to affordable health care for older adults and people with disabilities. These materials are presented here with support from YourMedicare.com and may not be distributed, modified or edited without Medicare Rights’ consent.

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