It is possible to have both private insurance and Medicare at the same time.
When you have both, a process called “coordination of benefits” determines which insurance provider pays first. This provider is called the primary payer.
Once the payment order is determined, coverage works like this:
- The primary payer pays for any covered services until the coverage limit has been reached.
- The secondary payer pays for costs that aren’t covered by the primary payer; however, it still may not cover all costs.
The provider that’s the primary payer can depend on the type of private insurance that you have, as well as your individual situation. In some cases, Medicare may be the primary payer — in others, it may be the secondary payer.
Can I keep my employer health insurance with Medicare?
If you’re receiving health insurance coverage from your current place of work but also qualify for Medicare, you may find yourself choosing between Medicare and your group health plan. In most cases, the size of the company where you work determines whether you’ll face penalties for choosing not to enroll in Medicare when you’re eligible.
Here are the rules for choosing employer health benefits instead of Medicare:
- 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’re under age 65 and eligible for Medicare because of a disability, you’re not required to sign up until you turn 65 years old. But if you’re still receiving group health insurance coverage at that time, the same rules listed above apply.
Once you retire and give up your employer health benefits, you will have a special enrollment period of 8 months to enroll in Part A and Part B, if you haven’t enrolled already. This special enrollment period begins the month after your employment or group health plan ends.
There is no late enrollment penalty for enrolling in original Medicare during this special enrollment period if the rules above were followed.
The Takeaway
If you already have a group health plan and have become eligible for Medicare, it’s important to know when you should enroll. Understanding Medicare’s eligibility rules regarding employer health insurance can help you avoid unnecessary late enrollment fees.
You may want to take into consideration your health needs, medical expenses, and spousal coverage before you choose whether to skip Medicare enrollment.
No matter whether you enroll into Medicare sooner or later, Medicare can work with your group health plan to cover both your medical needs and your medical costs.
What if I have additional questions about Medicare coverage?
- Medicare. You can get in touch with Medicare using its general contact information or by reaching out to its Benefits Coordination and Recovery Center directly at 800-MEDICARE (800-633-4227; TTY: 877-486-2048).
- Social Security Administration (SSA). Contacting the SSA at 800-772-1213 can help you get more information on Medicare eligibility and enrollment.
- State Health Insurance Assistance Program (SHIP). Each state has its own SHIP that can aid you with any specific questions you may have about Medicare.