This post reviews how Medicare works with group health insurance and some factors to consider about whether to start or delay Part B.

Group Health Insurance and Delaying Medicare

Some people turn 65 years old and plan to continue working and keep their group health insurance coverage and are trying to decide what to do about Medicare. Those who started Medicare early due to a disability have a different set of rules. This post only applies to those who are 65 and older. 

If you are 65 or older, AND you or your spouse are still currently working, AND you have group health insurance through that current employer, AND that employer has 20 or more employees, you have the option of delaying your Medicare start date. 

Getting it Wrong . . . Costs!

Getting your enrollment start date wrong has consequences, all of which affect your wallet, but in different ways according to the mistake that you made. If you start your Medicare sooner than you need to, then you’re spending more money on premiums—at least $2040 a year for most people and much higher for those who are high income. 

If you should have started Medicare already and haven’t, you’re under insured, even if you are not aware of it. You are also accruing late enrollment penalties and will have a delayed start date for your Medicare. That means you won’t just be able to enroll and have it start right away. You may have to wait many months or even up to a year for that coverage to go into effect. 

Employer Groups—Size Matters

Medicare makes a distinction between large employer groups and small employer groups.

  • 20 or more employees is a large employer group.
  • Fewer than 20 employees is a small employer group.

This makes a big difference in how your insurance and Medicare divide up responsibility for paying your claims.

For large employer groups, the group health insurance company is the primary payer and Medicare pays secondary. However, for small employer groups, Medicare pays primary and the insurance company pays secondary.

If you fail to enroll in Part B or D when you are with a small employer group, the insurance company will still be paying secondary, and YOU will have to be the primary payor.

Creditable Coverage

If you have health insurance through a large employer group and you’re still working, then you have “creditable coverage.” The word “credit” appears in that phrase “creditable coverage.” That means Medicare will give you credit for having health insurance, even though you didn’t enroll in Medicare when first eligible. 

If you have health insurance through a small employer group, retiree group, Cobra, or any number of other scenarios, your insurance is probably NOT creditable. That means that if you are not enrolled in Medicare, you are accruing late penalties and you are possibly under insured. 

How do you find out if your insurance is creditable? I recommend that you call the insurance company and ask “is this insurance considered creditable coverage for Medicare?” 

Secondary Payors

Small employer groups

Retiree group coverage


VA, CHAMPVA, Tricare

Enroll in Part B at 65. Ask about creditable coverage for Part D.


You will save yourself time and hassle if you KEEP the letter your health insurance company sends you that lists the start and end dates of your creditable coverage. You will need to submit this letter (possibly more than once) to get late penalties waived.

Proving Creditable Coverage

Here’s a pro tip for you. When you eventually do enroll in Medicare, you will be charged late penalties until you can PROVE that you had creditable coverage during those months or years that you were unenrolled. You do this through a “letter of creditable coverage,” which you will get from your insurance company. If you’ve had multiple insurance companies since you turned 65 and became eligible for Medicare, you will need multiple letters of creditable coverage in order to waive those penalties. 

It’s a big hassle to chase insurance companies for it after the fact so I recommend when you get your letter of creditable coverage, you keep it in a special place because you will have to submit that proof when asked for it.

Group Insurance Vs. Medicare

If you have a group health insurance that is considered creditable coverage you have a decision to make: 

  • Delay Medicare and have only group health insurance.
  • Drop group health insurance (if your employer allows it) and have only Medicare.
  • Some combination of the two. For example, start Part A and delay Parts B and D. Or, you might want to start Part D also if you have really expensive prescriptions.

Which option is best for you depends on the costs associated with your group health insurance plan and how they compare to Medicare.


If you’re considering delaying your Medicare enrollment, I would ask first if you have a spouse or any dependent who would be affected by making a change in your health care at this time. If no one will be affected other than you, then just do a cost/benefit analysis. (I will help you do the math if you have the relevant numbers for your group health plan.)

Costs vs. Benefits

In addition to asking the monthly premiums for each scenario, you’ll also want to find out what the maximum out of pocket liability is, whether there are any deductibles, copayments, coinsurance and any other costs that may be associated with your options. 

If you are high income, don’t forget to add in the IRMAA charges for Medicare Parts B and D when you’re doing your analysis.

Additional Help

If you need help evaluating your options, please book an appointment with me and we can go through it together. We may even want to do a three way call with your insurance company or your employer group to ask the right questions so that we can find out what your options are.

Medicare has an interactive tool that will lead you through a series of questions and provide information that’s relevant to your situation. I encourage you to use it to help guide your decisions.

Disclosure Required: Some people have group health insurance that they consider inadequate, but they are not allowed to drop it. Perhaps it has a very high deductible, an inconvenient network of providers, or something else that will make you hesitate to use it.

It is legal to have group health insurance plus Medicare Parts A, B, and D, plus either a Medicare Advantage Plan OR a Medicare Supplement. However, when you apply for your Advantage plan or Supplement, you will need to disclose having the group insurance on your application.

Help is free!

I’m Laraine Sookhoo and I’m passionate about helping you understand your Medicare options so you can get the most out of your Medicare benefits. My help is free, so book an appointment to get started!

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