COBRA and Medicare: Know the Rules

If we’re working for an employer that has twenty or more full time employees, Medicare A & B pays on a secondary basis to our employer group health plan.  Thus, for many seniors with employer group coverage there’s no need to take Medicare when first available at age 65.  However, when employment ends and we become COBRA eligible, problems can develop.  Enrolling in COBRA without taking Medicare triggers two very significant exposures;

  1. COBRA is not creditable coverage. CMS Medicare guidelines leave you without credit for being insured when you’re on COBRA. This means the clock starts on your Medicare Special Enrollment Period the moment you lose employer group coverage and move to COBRA. When the clock starts, you have only 8 months to enroll with Medicare for Parts A & B. Otherwise you’re facing late enrollment penalties and waiting periods.
  2. COBRA is a secondary payer to Medicare. COBRA coverage pays after Medicare, as if you have Parts A & B. Failure to sign up for Medicare immediately on or before becoming COBRA eligible leaves you financially exposed and personally obligated to pay more than 80% of any medical bills incurred.

COBRA notices written by the Department of Labor don’t do a good job explaining the exceptional rules of Medicare.  It’s always wise to seek counsel from a specialist Medicare insurance broker, or your State Health Insurance Assistance Program.

For more information on Medicare, go to: .  For questions on this article, or to discuss senior insurance plans and services, please contact Kevin Guss, at or 314.594.2717.


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About Kevin Guss

Kevin J. Guss is a Consultant with our Private Client Benefit Services, specializing in providing individual health coverage (on and off-exchange), Medicare supplements, life, LTC and disability insurance to clients of J.W. Terrill and strategic partners. With more than 22 years of industry experience, Kevin counts many retired professional athletes, celebrities, business leaders and prominent members of the community among his clients. He has a Group Benefits Associate designation from the Wharton School of the University of Pennsylvania, a Past President of St Louis Association of Health Underwriters and a current board member of the MO Association of Health Underwriters.

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