Employer Coverage and Medicare: The Size Rule That Changes Everything

If you have active health coverage from an employer with 20 or more employees, you can usually delay Medicare Part B without penalty while that coverage is active. Once employment or coverage ends, you have an 8-month Special Enrollment Period to enroll in Part B — and missing that window results in permanent late-enrollment penalties.

Key Rules

  • Employer size is the key threshold: 20+ employees means employer plan pays first; under 20 means Medicare pays first
  • Active employment coverage lets you delay Part B safely — COBRA and retiree plans do NOT have the same protection
  • When active coverage ends, you get an 8-month Special Enrollment Period to enroll in Part B penalty-free
  • Missing the SEP after employer coverage ends results in a permanent Part B premium penalty of 10% per year