Medicare Secondary Payer decides who pays first.
The Medicare Secondary Payer rules determine when an employer group health plan pays before Medicare and when Medicare pays first.
The Basics for Employers.
A plain-English summary. This is general information, not legal advice, and the rules change, so check the current text.
Age-Based Coverage
For employees and spouses age 65 and older, the employer plan is generally primary when the employer has at least 20 employees.
Disability-Based Coverage
For people under 65 on Medicare because of disability, the employer plan is generally primary when the employer has at least 100 employees.
Kidney Failure
For end-stage renal disease, the employer plan is generally primary for the first 30 months of Medicare eligibility.
How it plays out.
Medicare Secondary Payer rules decide whether an employer plan or Medicare pays first for a person who has both. For some people the employer plan must pay first and Medicare pays second. For others, Medicare is primary.
The answer depends on employer size and the reason for Medicare eligibility. For employees age 65 or older, the employer plan is generally primary if the employer has 20 or more employees. For Medicare based on disability, the threshold is generally 100 employees. For end-stage renal disease, there is a coordination period during which the employer plan is primary.
A plan cannot take steps that discourage Medicare-eligible people from using the employer plan, such as offering a different benefit because they have Medicare. Getting this wrong is a compliance problem and can create claim disputes.
Where This Shows Up in Your Plan.
Employer Benefits Guides: Eligibility, Plan Design, Life Events and Rules
Eligibility and plan design rules that connect to these decisions.
COBRA Administration
How continuation coverage interacts with Medicare.
Checking your plan.
Count Employees
Know which size threshold applies to your group.
Identify Medicare-Eligible Members
List active employees and spouses with Medicare.
Confirm Primary Payer
Check who pays first for each person.
Review Plan Terms
Make sure no benefit differs because of Medicare.
Mistakes to avoid.
Assuming Medicare Always Pays First
For many active workers it does not.
Offering Incentives to Drop the Plan
This is generally not allowed.
Skipping Coordination Reporting
Carriers and Medicare may need coordination information.
Other Rules Employers Work With.
ERISA
29 U.S.C. Chapter 18
COBRA Continuation Coverage
29 U.S.C. 1161
Family and Medical Leave Act
29 U.S.C. Chapter 28
Laws and Rules Referenced
Medicare Secondary Payer (42 U.S.C. 1395y) — The statute text, published by Cornell Law School’s Legal Information Institute.
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