Medicare’s secondary payer rules decide which insurance pays first when you have Medicare alongside other coverage. The order depends on why you qualified for Medicare, whether you or a spouse is still working, the size of the employer behind the other plan, and whether the care relates to an injury or accident. Get the order wrong and the consequences can follow you for years, from repayment demands to a permanent surcharge on your Part B premium.
Working Past 65 With Employer Coverage
If you’re 65 or older and covered by a group health plan through your own or a spouse’s current job, employer size is the deciding factor. When the employer has 20 or more employees, the group plan pays first and Medicare pays second.1Office of the Law Revision Counsel. 42 USC 1395y – Exclusions From Coverage and Medicare as Secondary Payer When the employer has fewer than 20, Medicare is primary and the group plan pays second.
The 20-employee threshold has a specific definition. The employer must have at least 20 full-time or part-time employees on the rolls for each working day in 20 or more calendar weeks in the current or preceding year, and those weeks don’t have to be consecutive.2Centers for Medicare & Medicaid Services. MSP Employer Size Guidelines for GHP Arrangements – Part 2 Once an employer meets the threshold, Medicare stays secondary for the rest of that calendar year and the following year, so a mid-year headcount drop doesn’t immediately flip the order.
Declining employer coverage doesn’t change the order either. If you were entitled to join a large-employer plan and turned it down, Medicare still treats itself as the secondary payer and covers only what a secondary payer would cover. That can leave you with a much larger bill than you expected.
One narrow exception matters for people at very small companies that participate in a multi-employer plan (common in unionized industries). A small employer with fewer than 20 employees can request a Small Employer Exception through the Benefits Coordination & Recovery Center. If approved, Medicare becomes primary for beneficiaries tied to that specific small employer within the larger plan.3Centers for Medicare & Medicaid Services. Small Employer Exception It only applies to the working aged rule.
Under 65 and on Medicare Through Disability
The threshold jumps for people who qualify for Medicare through a disability. If you’re covered by a group health plan through your own or a family member’s current job at an employer with 100 or more employees, that plan is primary and Medicare is secondary.1Office of the Law Revision Counsel. 42 USC 1395y – Exclusions From Coverage and Medicare as Secondary Payer Fewer than 100 employees and Medicare pays first.
Both full-time and part-time workers count toward 100. An employee counts on any day they’re on the payroll, even if they didn’t work that day. Self-employed individuals who participate in the plan aren’t counted.4Centers for Medicare & Medicaid Services. MSP Employer Size Guidelines for GHP Arrangements – Part 1 Workforce numbers can move, so if you’re relying on this arrangement, check the employer’s current size each year rather than assuming last year’s answer still holds.
End-Stage Renal Disease and the 30-Month Rule
If you qualified for Medicare because of End-Stage Renal Disease, employer size doesn’t matter at all. For a 30-month coordination period, the group health plan pays first regardless of whether the employer has five workers or five thousand. Medicare is secondary during that window.5Centers for Medicare & Medicaid Services. End-Stage Renal Disease (ESRD)
The 30-month clock starts the first month you become entitled to Medicare Part A based on ESRD, or the first month you would have been entitled if you had filed on time.1Office of the Law Revision Counsel. 42 USC 1395y – Exclusions From Coverage and Medicare as Secondary Payer After 30 months, Medicare becomes primary. The group plan cannot cut benefits or push you to drop coverage during the coordination period.
Overlaps happen. If you become eligible through ESRD first and later qualify through age or disability, the 30-month period keeps running unchanged; when it ends, Medicare becomes primary. If you already had Medicare through age or disability and then developed ESRD, Medicare keeps whatever role it was already playing, secondary or primary, throughout the 30 months. ESRD never worsens your existing arrangement.6Centers for Medicare & Medicaid Services. Medicare Secondary Payer End Stage Renal Disease (ESRD)
Injuries, Accidents, and Settlements
Workers’ compensation, no-fault auto insurance, and liability insurance always pay before Medicare for care tied to that injury or accident. Employer size, age, and how you qualified for Medicare don’t change this.7Centers for Medicare & Medicaid Services. Non-Group Health Plan Recovery If you’re hurt at work, workers’ comp handles it. If you’re injured in a car crash, the auto or liability insurer handles it.
Cases like these often take months or years to resolve. While you wait, Medicare may pay your bills conditionally so you can get treatment. Once a settlement, judgment, or award arrives, you have 60 days to reimburse Medicare.8eCFR. 42 CFR 411.24 – Recovery of Conditional Payments The Benefits Coordination & Recovery Center sends a notice early in the process, then a detailed list of what Medicare paid, and finally a formal demand letter after settlement is reported. Interest starts accruing from the date of that demand, and unpaid debts can be sent to the Treasury for collection after 150 days.9Centers for Medicare & Medicaid Services. Medicare’s Recovery Process
Federal law also gives the government a private right of action with double damages against a primary plan that fails to pay when it should have.1Office of the Law Revision Counsel. 42 USC 1395y – Exclusions From Coverage and Medicare as Secondary Payer An insurer that ducks its primary responsibility can end up paying twice.
If you’re settling a workers’ compensation claim and you already have Medicare, or expect to enroll within 30 months, a Workers’ Compensation Medicare Set-Aside Arrangement sets aside part of the settlement to cover future injury-related care that Medicare would otherwise pay for. CMS reviews proposed arrangements when the settlement exceeds $25,000 for current beneficiaries or $250,000 for those expecting to enroll within 30 months.10Centers for Medicare & Medicaid Services. Workers’ Compensation Medicare Set Aside Arrangements
Retiree Plans, COBRA, and TRICARE for Life
Once you retire and enroll in Medicare, a former employer’s retiree health plan almost always pays second. Medicare pays first and the retiree plan mops up coinsurance, deductibles, and services Medicare doesn’t cover. Watch one detail: many retiree plans will not pay their secondary share unless you are enrolled in Part B. Skipping Part B on the assumption that the retiree plan handles everything can leave large gaps.
COBRA doesn’t work the way employer coverage does. Because you are no longer actively employed, COBRA doesn’t count as coverage based on current employment, and the working aged and disability rules that would otherwise make an employer plan primary don’t apply. Medicare pays first and COBRA pays second.11Medicare.gov. COBRA Coverage If you’re Medicare-eligible but haven’t enrolled, your COBRA plan may pay only its secondary share and leave the rest on you. A group health plan can also terminate COBRA once you become entitled to Medicare after electing it.12U.S. Department of Labor. FAQs on COBRA Continuation Health Coverage for Workers Don’t use COBRA as a substitute for enrolling in Medicare when you’re eligible.
For military retirees with TRICARE for Life, Medicare pays first and TRICARE picks up most or all of what remains, with no deductibles or cost-shares on Medicare-covered services. Add a current-employer plan into the mix and the order becomes employer plan, Medicare, then TRICARE. Overseas, TRICARE is primary because Medicare generally doesn’t pay for care outside the United States.13TRICARE. TRICARE For Life
Why Getting the Order Right Protects Your Part B Premium
Misjudging which plan is primary can trigger a permanent penalty. If you’re working past 65 at an employer with 20 or more employees, the group plan is primary and you can safely delay Part B without penalty. If the employer has fewer than 20 employees, Medicare is primary and every full 12-month period you delay Part B adds 10% to your monthly premium for life.14Medicare.gov. Avoid Late Enrollment Penalties
The standard 2026 Part B premium is $202.90 per month.15Centers for Medicare & Medicaid Services. 16Social Security Administration. Special Enrollment Period (SEP) Miss that window and you’ll wait for general enrollment in January through March with coverage starting in July, and the late penalty accrues in the meantime. COBRA and retiree coverage do not create a Special Enrollment Period when they end. Treat your last day of active employment as the real deadline.
Reporting Your Other Coverage
You are responsible for telling Medicare about other coverage. Providers may ask a set of screening questions to identify who should pay first, and the Benefits Coordination & Recovery Center handles coordination questions at (855) 798-2627.17Centers for Medicare & Medicaid Services. Benefits Coordination and Recovery Center (BCRC) If you have a pending liability, no-fault, or workers’ compensation matter, report it early so recovery doesn’t blindside you at settlement.9Centers for Medicare & Medicaid Services. Medicare’s Recovery Process