How Do Medicare and Employer Health Insurance Work Together?
Reviewed by: Brett Braithwaite, Licensed Insurance Agent. Written by: Bryan Strickland.
If you delay Part B enrollment for employer health insurance, you generally can switch to or add Part B without penalty.
While Part A of Original Medicare is usually a no-cost monthly premiumA premium is a fee you pay to your insurance company for a health plan coverage. This is usually a monthly cost. option that complements employer insurance; Part B charges a monthly premium that sometimes overlaps employer coverage.
You should decide whether Part B or employer coverage is the right fit for you. If you determine that having both is beneficial, it’s important to understand which plan pays first.
It’s good to have choices in life.
It’s even better when you make the right choice.
If you opted against enrolling in Medicare Part B when you turned 65 because you had medical insurance through your job or your spouse’s job, then you already tackled a crucial decision related to Medicare.
But just because it was the right choice for you yesterday doesn’t mean it’s the right choice today.
Since costs associated with employer-sponsored health plans change all the time, it might make sense for you to switch to Medicare or perhaps even add Medicare to supplement your existing plan.
How do you determine if it’s time for a change? And if it is time, how do you make that change?
Let’s dive in.
This one usually is pretty straightforward but is worth mentioning: If you’re 65 or older and your employer health coverage ends, Medicare is waiting for you.
Just don’t wait too long.
When you leave a job that provides health insurance, that launches an eight-month Special Enrollment Period that allows you to sign up for Medicare without the lifetime late penalty that you otherwise would incur for enrolling after age 65. You probably knew that when you opted not to enroll in Medicare Part B during your Initial Enrollment Period surrounding your 65th birthday, but it bears repeating.
You probably won’t be waiting eight months though, since Medicare is a group health insurance plan on a grand scale that helps pay for medical expenses as you get older.
“Should I enroll in Medicare if I have employer insurance?”
While the decision to enroll in Part B after you no longer have employer insurance can be a pretty obvious one, it might also be obvious that you should pass on Part B if you have an employer plan.
But you still need to keep a couple of things in mind because there are exceptions.
If you carry both an employer plan and Part B, Medicare defines a “primary payer” and a “secondary payer,” referring to which insurance pays toward your medical expenses first. 
- If you’re on an employer plan for a company that has 20 or more employees, then that plan is the primary payer. Often, Part B as the secondary payer will be left to pay little or nothing, so adding Part B coverage often isn’t cost-effective.
- If, however, your company has fewer than 20 employees, then Medicare is the primary payer. That means there are scenarios where carrying both could make sense. Your employer’s benefits department should be able to help sort out your options.
As mentioned before, pairing Part A with an employer plan makes sense in many cases because Part A typically doesn’t charge a premium and therefore can provide no-cost assistance in support of your employer plan if you require hospitalization.
You may be asking yourself by now, “Can I drop my employer health insurance and go on Medicare?”
Depending on the details of your employer insurance — including increased costs year over year — Medicare may be the right fit for you.
How much does Medicare cost if you are still working? In the case of Original Medicare, the answer is the same whether you’re working or not.
Medicare Part B premiums rose just $3.90 per month for 2021, increasing from $144.60 to $148.50. 
If your employer plan experienced a more dramatic increase, or if you haven’t closely compared the benefits offered by your employer plan and Part B, a change could benefit you.
A GoHealth licensed insurance agent can help you determine which is right for you and also can introduce you to Medicare Advantage. Also known as Part C, Medicare Advantage plans don’t always have monthly premiums like Part B does but provide similar coverage. Our agents can review your situation, without cost or obligation.
When can I add Medicare to complement my employer plan?
Anytime. The Social Security Administration, which administers Medicare enrollment, views adding Medicare to an existing employer health plan as an ongoing Special Enrollment Period.  So at any point that you’re on an employer plan, you can pair Medicare with it.
When can I add or switch to Medicare if I have private insurance?
When it comes to other forms of insurance, the exceptions that allow you to add or switch to Medicare after age 65 are limited to employer-sponsored insurance.
If you passed on Medicare Part B during your Initial Enrollment Period because you had insurance through the healthcare marketplace, then making a change likely will subject you to the lifetime late penalty associated with Part B. You also won’t get a Special Enrollment Period when the marketplace coverage ends, so you’ll have to sign up for Medicare during the General Enrollment Period (January 1-March 31). Coverage will take effect on July 1.
If this describes your situation, a GoHealth licensed insurance agent can help determine if you have other options.
If I’m 65 or older, can I just add a Part D prescription plan to complement my employer health insurance?
Only if you also have Original Medicare (Parts A and B), which is required for you to qualify for a Part D plan. If you add or switch to Original Medicare during the General Enrollment Period that runs from January 1-March 31, you will have from April 1-June 30 to add a Part D plan that will take effect along with Original Medicare on July 1. You also can use your pending Original Medicare status to instead bundle coverage with a Medicare Advantage plan that you choose between April 1 and June 30.