How does Medicare coordinate with my employer plan: who pays first?

Short answer: For active employees 65+, the employer plan pays first if the employer has 20 or more employees, with Medicare second. If the employer has fewer than 20 employees, Medicare pays first. Disability-based Medicare uses a 100-employee threshold, and ESRD has its own 30-month coordination period.

Medicare Secondary Payer (MSP) rules set the order of payment:

  • Age-based (65+), employer with 20+ employees: the group health plan is primary, Medicare secondary.
  • Employer with fewer than 20: Medicare is primary, the group plan secondary.
  • Disability-based Medicare: the group plan is primary only at employers with 100+ employees.
  • End-stage renal disease (ESRD): the group plan is primary for the first 30 months, then Medicare.

For true retirees, Medicare is generally primary and retiree coverage pays second. Employers may not illegally incentivize active Medicare-eligible employees off the group plan.

Sources

  • Medicare Secondary Payer statute, 42 U.S.C. §1395y(b); CMS MSP guidance.

Content history
Originally published: June 16, 2026
Last reviewed: June 16, 2026

Compliance Medicare Coverage