February 2022: Making Medicare Enrollment Decisions When You Have Other Coverage

Medicare Part B and job-based insurance

The Part B Special Enrollment Period (SEP) lets you delay enrollment in Part B without penalty if you were covered by insurance based on your or your spouse’s current work when you first became eligible for Medicare. You can enroll in Medicare Part B without penalty while you have job-based insurance and for up to eight months after you lose your group health coverage or you (or your spouse) stop working, whichever comes first. In most cases, though, you should only delay Part B if your job-based insurance would be primary and your Medicare would be secondary (see the chart on the next page).

Medicare Part B and other types of insurance

  • Retiree insurance almost always pays secondary to Medicare, meaning you need to enroll in Medicare when first eligible to be fully covered.
    • One exception is Federal Employee Health Benefits (FEHB) retiree coverage, which continues paying primary for retirees who do not enroll in Part B. But note that you will not have an SEP to enroll in Part B later and may have to wait for coverage and/or pay a penalty.
  • If you have a Qualified Health Plan (QHP) from the Marketplace, you should almost always disenroll from it and enroll in Medicare when you become eligible.
  • If you have COBRA when you become Medicare-eligible, or are offered COBRA when you lose job-based insurance after you are Medicare-eligible, you should enroll in Part B when you become eligible. You are not entitled to an SEP when COBRA ends.
  • If you have Veterans Affairs (VA) VA coverage and choose not to enroll in Medicare, you will not have health insurance for facilities outside the VA health system. You should sign up for Medicare when you become eligible if you want to get covered health care outside the VA system.

Note that having any of these types of insurance does not grant you an SEP if you decide to delay Medicare enrollment. If you decide not to enroll in Medicare because you have one of these types of insurance, but then later change your mind, you will likely face lifetime premium penalties and a coverage gap.

The Part B late enrollment penalty (LEP)

For each 12-month period you delay enrollment in Medicare Part B, you will have to pay a 10% Part B premium penalty, unless you are eligible for a Part B Special Enrollment Period. For example, if you delayed enrolling for 8 years, your monthly premium would be 80% higher for as long as you have Medicare. Since the base Part B premium in 2022 is $170.10, your monthly premium with the penalty would be $306.18.

Enrolling in Part D when you already have prescription drug coverage

If you are considering delaying Part D enrollment because you already have prescription drug coverage, first find out if your coverage is considered creditable. Maintaining enrollment in creditable drug coverage means you will not incur a late enrollment penalty for delaying Part D enrollment and that you will have an SEP to enroll in a Part D plan in the future. You should receive a notice from your employer or plan around September of each year, informing you if your drug coverage is creditable. Several types of plans offer creditable drug coverage, including VA benefits, FEHB, and some job-based and retiree plans. Remember, if you decide to delay enrollment in any part of Medicare, keep a record of your insurance until you enroll in Medicare. You may need this documentation to sign up for Medicare later.

The Part D late enrollment penalty (LEP)

Any Part D LEP you incur is calculated as 1% of the national base premium for each month you delayed enrollment. The national base premium in 2022 is $33.37 a month. If you delayed Part D enrollment for seven months, your monthly premium would be $2.34 ($33.37 x 7% = $2.34) per month, which you would pay in addition to your plan’s premium.

How Medicare Coordinates with other insurance

Type of Insurance Conditions Primary Secondary
65+ with job-based insurance Fewer than 20 employees Medicare Employer
20+ employees Employer Medicare
Disabled with job-based insurance Fewer than 100 employees Medicare Employer
100+ employees Employer Medicare
Retiree insurance Not Medicare-eligible Retiree
Eligible for Medicare Medicare Retiree
VA benefits Claim from VA facility VA benefits
Claim from non-VA facility Medicare
COBRA Had COBRA before enrolling in Medicare Medicare
Had Medicare before becoming eligible for COBRA Medicare COBRA