Who Pays First: Medicare vs. Employer Plan Under 20 Employees
Medicare pays first (primary) and the employer plan pays second (secondary) when the employer has fewer than 20 employees and you are 65 or older. This applies even if you are still actively working. Because Medicare is primary, the employer plan may pay very little on outpatient claims if you have not enrolled in Part B — it is structured to pay after Medicare, not instead of it.
Frequently Asked Questions
- Does it matter if I am still working when my employer has under 20 employees?
- No. For small employers (under 20 employees), Medicare is primary at 65 regardless of active employment status. Employer size is the controlling factor, not whether you are working.
- What happens if I do not have Part B and submit a claim to my employer plan?
- The employer plan will pay its secondary share — which may be very little or nothing — because it expects Medicare to have paid first. Without Part B, Medicare has not paid, so your employer plan's secondary payment may not cover the bill.
- Does this rule apply to coverage from my spouse's employer?
- Yes. If your spouse's employer has fewer than 20 employees and you are covered under that plan, Medicare is still primary for you at 65. The same small-employer rule applies regardless of whose employer provides the coverage.