Medicare · Cornerstone
Medicare and employer coverage: who pays first, and how to sign up for Part B
Last reviewed October 12, 202611 min readBy the Goodsurance editorial team Reviewed by the Goodsurance editorial team
You can have Medicare and employer coverage at the same time. When you do, one pays your bills first and the other pays second. Which one goes first depends on how big the employer is and why you have Medicare. This page shows who pays first in each case, the two forms you need for Part B when the job ends, and what to do about drug coverage.
1The short version
If you only read one part of this page, read this. Still deciding whether to keep working past 65? Start with working past 65 with Medicare. This page covers how the two kinds of coverage work together.
The short version
You can have Medicare and job coverage at the same time
One pays first. The other pays second.
Employer size decides who pays first at 65
20 or more employees: the job plan pays first. Fewer than 20: Medicare pays first.
The coverage must come from a current job
Yours or your spouse's. COBRA and retiree coverage do not count.
When the job ends, you get 8 months
Sign up for Part B in that time to avoid a penalty. Best: sign up a month before your coverage ends.
It takes two forms
CMS-40B to sign up for Part B, and CMS-L564 to prove your job coverage. Or apply online.
Keep your drug coverage letter
It says if your job drug plan is "creditable." That protects you from the Part D penalty.
2The 20-employee rule decides who pays first at 65
The first question is not "Do I like my coverage?" It is "How many people work for this employer?"
20 or more employees. Your job plan pays first and Medicare pays second. You can usually wait to sign up for Part B with no penalty, as long as you have coverage from a current job.
Fewer than 20 employees. Medicare pays first once you are 65. Your job plan pays second, and it may pay very little if you do not have Part B. So enrolling on time matters much more.
The count includes plans where several employers join together, if at least one of them has 20 or more employees. Not sure? Ask your benefits office whether your plan pays first or second when you have Medicare. Ask if you need Part A and Part B. If you skip them, your job plan might not cover your care.
- Job plan pays first
- You can usually wait on Part B
- Medicare pays first at 65
- Waiting on Part B can leave bills unpaid
3Who pays first: every case in one table
Age is not the only way to get Medicare. If you get it because of a disability or kidney failure, the rules change.
Disability. Most people under 65 get Medicare after 24 months of Social Security disability benefits. If you have job coverage from your own, your spouse's, or a family member's current job, the employer line is 100 employees, not 20.
Kidney failure (ESRD). If you have an employer or union plan, it pays first for 30 months. This is called the coordination period. After that, Medicare pays first. A new 30-month period starts each time you sign up for Medicare because of kidney failure.
| Your situation | Pays first | Pays second |
|---|---|---|
| 65 or older, job plan from an employer with 20 or more employees | Job plan | Medicare |
| 65 or older, job plan from an employer with fewer than 20 employees | Medicare | Job plan |
| Under 65 with a disability, employer with 100 or more employees | Job plan | Medicare |
| Under 65 with a disability, employer with fewer than 100 employees | Medicare | Job plan |
| Kidney failure (ESRD), with an employer or union plan | Job plan for the first 30 months, then Medicare | Medicare for the first 30 months, then the job plan |
| 65 or older with COBRA | Medicare | COBRA |
| Retiree coverage from a former job | Medicare | Retiree plan |
Employee counts include multi-employer plans where at least one employer meets the size. Sources: Medicare.gov, "Who pays first" and "End-Stage Renal Disease."
4What "pays second" means for your bills
The plan that pays first pays up to its limits. Then the bill goes to the plan that pays second. If the second plan does not cover the rest, you may owe it.
If the first plan is slow. If it does not pay within about 120 days, your doctor may bill Medicare. Medicare may make a "conditional payment." Later, it gets that money back from the plan that should have paid.
If you go out of network. Say your job plan is an HMO or PPO that pays first. If you get care outside its network, it is possible that neither plan pays. Call your plan first.
If you have questions. Medicare's Benefits Coordination and Recovery Center can tell you who pays first: 1-855-798-2627 (TTY 1-855-797-2627). Tell your doctors about any change in your coverage.
How a bill moves when you have two kinds of coverage
Source: Medicare.gov, "How Medicare works with other insurance."
5Premium-free Part A is usually a yes, with one exception
Most people pay no premium for Part A, because they paid Medicare taxes while working. So most people sign up for Part A at 65 even if they keep job coverage. It can help pay some hospital costs as second payer.
The exception is a Health Savings Account (HSA). Once you have any part of Medicare, even premium-free Part A, you cannot put new money into an HSA. And Part A coverage can start up to 6 months before the date you sign up. So stop your HSA deposits 6 months before you sign up for Medicare or apply for Social Security. Deposits made during those months can cost you a tax penalty. The full HSA plan is in working past 65 with Medicare.
6Your 8 months to sign up for Part B when the job ends
If you waited on Part B because you had coverage from a current job, you get a Special Enrollment Period (SEP). It lasts 8 months. It starts when the job ends or when the coverage ends, whichever comes first. Sign up within those 8 months and you pay no Part B penalty.
The clean play is to sign up about a month before your job coverage ends. That way Part B starts with no gap.
Choosing COBRA does not stop the clock. The 8 months start when the job ends, even if you keep COBRA.
The eight months, and the clean play
7The two forms: CMS-40B and CMS-L564
You sign up for Part B through Social Security, not Medicare. If you already have Part A, you can apply online at SSA.gov. Or you can use two paper forms:
- CMS-40B, Request for Enrollment in Medicare Part B. This is the sign-up form.
- CMS-L564, Request for Employment Information. This proves you had group coverage from a current job since you first could get Part B. Your coverage must not have ended more than 8 months ago.
Do not have Part A yet? Do not use the CMS-40B. Apply for Medicare with Social Security instead. You can get both forms from CMS at no cost, in English and Spanish.
How to sign up for Part B when your job coverage ends
1. Pick your timing
Start about a month before your job coverage ends, so there is no gap.
2. Fill out Section A of form CMS-L564
It is called "Request for Employment Information." It proves you had job coverage.
3. Ask your employer to fill out Section B
If they can't, fill out Section B yourself as best you can, but don't sign it. Send proof of your job coverage with it.
4. Fill out form CMS-40B
It is the "Request for Enrollment in Medicare Part B." Use it only if you already have Part A.
5. Choose when Part B starts
If you sign up while still covered, or in the first full month after, you can pick a start date: the month you sign up or one of the 3 months after.
6. Send both forms to Social Security
Mail or fax them to your local office (find it at SSA.gov/locator). Or apply online at SSA.gov. Railroad workers go to the RRB.
8Drug coverage: is your employer plan "creditable"?
"Creditable" means your job drug plan is expected to pay, on average, at least as much as Medicare drug coverage (Part D). Your plan must tell you if it is creditable, and it sends you a notice every year. Keep that notice. You may need it when you join a Medicare drug plan. Do not send it to Medicare.
If it is creditable, you can wait to join Part D. You pay no penalty as long as you never go 63 days or more in a row without creditable drug coverage.
If it is not, the Part D penalty can add up. It is 1% of the national base premium for each full month you went without creditable coverage. It is added to your premium for as long as you have Part D.
Before you add Part D, call your benefits office. If you have employer or union coverage and join a Medicare drug plan, you might lose your job health and drug coverage. That can include coverage for your family, and you may not be able to get it back.
- You can wait to join Part D
- No penalty if you never go 63 days without coverage
- Each month without Part D can add to a penalty
- The penalty lasts as long as you have Part D
9The Part B penalty, and how the 8 months protect you
If you sign up for Part B late without a Special Enrollment Period, you pay a penalty. It adds 10% to your Part B premium for each full 12 months you could have had Part B but did not. For most people, it lasts for life.
Coverage from a current job, at an employer big enough to pay first, is what keeps you safe. When the job or the coverage ends, sign up within your 8 months. Then there is no penalty. See the Part B late enrollment penalty for the math.
10The coverage that does not count
Some coverage looks like it protects you, but it does not.
COBRA does not count. It is not coverage from a current job. If you have COBRA at 65 and have not signed up for Medicare, sign up now. Do not wait for COBRA to end. Your COBRA will probably end once you sign up.
Retiree coverage does not count. It comes from a former job. Medicare pays first, and the retiree plan may not pay at all if you skipped Part A and Part B. Before you join any Medicare plan, ask if it could make you or your family lose your retiree coverage.
A spouse's plan can count. But the 20-employee test is about your spouse's employer. And your 8 months start when your spouse's job or coverage ends.
Free help is available from your State Health Insurance Assistance Program (SHIP) at shiphelp.org.
- Not coverage from a current job
- Your 8 months may already be running
- From a former job, so it does not count
- It may not pay if you skip Part A and Part B
- The 20-employee test is their employer
- Your 8 months start when their job or coverage ends
Common questions about Medicare
Quick answers to common questions
Tap any question to expand. Each question links to a fuller standalone answer.
Do I have to get Medicare if I have employer coverage?
Not always. If you have coverage from a current job at an employer with 20 or more employees, you can usually wait to sign up for Part B with no penalty. If the employer has fewer than 20 employees, Medicare pays first at 65, so you should sign up on time.
What if I'm still working at 65 and have my employer's health insurance?
Ask your benefits office whether your plan pays first or second with Medicare. Many people take premium-free Part A and wait on Part B. Unless you have an HSA, premium-free Part A usually makes sense. When the job ends, you have 8 months to sign up for Part B.
Can I have both Medicare and employer coverage?
Yes. One pays first and the other pays second. The plan that pays second may help with costs the first one did not pay.
Is Medicare primary or secondary to employer coverage?
It depends on the employer's size. At 65 or older, a job plan from an employer with 20 or more employees pays first, and Medicare pays second. With fewer than 20 employees, Medicare pays first. For disability, the line is 100 employees.
What forms do I need to sign up for Part B when I leave my job?
Form CMS-40B to sign up for Part B, and form CMS-L564 to show you had job coverage. Your employer fills out Section B of the CMS-L564. Mail or fax both to your local Social Security office, or apply online at SSA.gov.
What if my employer will not fill out form CMS-L564?
Fill out Section B yourself as best you can, but do not sign it. Send it with proof of your job coverage, such as pay stubs that show health premiums or an insurance card with dates.
How do I know if my employer drug coverage is creditable?
Ask your plan. It has to tell you, and it sends you a notice every year. Keep that notice for when you join a Medicare drug plan.
Does COBRA count as employer coverage for Medicare?
No. COBRA is not coverage from a current job. It does not give you a Special Enrollment Period for Part B, and once you are on Medicare at 65, Medicare pays first.
I am under 65 and get disability benefits. Who pays first?
If you have coverage from a current job (yours, your spouse's, or a family member's) at an employer with 100 or more employees, the job plan pays first. With fewer than 100 employees, Medicare pays first.
I have kidney failure and a job-based plan. Who pays first?
Your employer or union plan pays first for 30 months. Medicare pays second during that time. After the 30 months, Medicare pays first.
Can I keep putting money in my HSA after I sign up for Medicare?
No. Once any part of Medicare starts, you cannot add new money to an HSA. You can still spend what is in it. Stop deposits 6 months before you sign up, because Part A can start up to 6 months back.
What happens if my employer plan does not pay a claim on time?
If the plan that should pay first does not pay within about 120 days, your doctor may bill Medicare. Medicare may pay for now and get the money back from the other plan later.
References
- Medicare.gov: Working past 65When you can wait on Part B, the 8-month SEP, COBRA, HSAs, and creditable drug coverage.
- Medicare.gov: How Medicare works with other insurancePrimary and secondary payers, conditional payments, and the Benefits Coordination and Recovery Center.
- Medicare.gov: Who pays firstThe 20-employee and 100-employee rules, COBRA, and retiree coverage.
- Medicare.gov: End-Stage Renal Disease (ESRD)The 30-month coordination period.
- Medicare.gov: Ready to sign up for Part A and Part BOnline sign-up and the paper forms.
- CMS: Form CMS-40B, Request for Enrollment in Medicare Part BThe Part B sign-up form (revised July 2025).
- CMS: Form CMS-L564, Request for Employment InformationProof of job coverage for the Special Enrollment Period (revised March 2025).
- Medicare.gov: Avoid late enrollment penaltiesThe Part B penalty (10% per full 12 months) and the Part D penalty (1% per month, 63-day rule).
- IRS: Publication 969, Health Savings AccountsNo HSA contributions once Medicare starts, including backdated coverage.