cobra and medicare are the two words that cost older workers the most money. You turn 65. You keep working, or your job ends and you elect COBRA. It feels like real coverage, so you delay Part B. Medicare does not see it that way. COBRA is not coverage based on current employment. That single distinction drives every rule below.
This cobra and medicare guide walks through the payer order, the enrollment windows, the two forms and the penalty math. It describes a process. It does not predict what Social Security will decide in your case. Before you drop or delay anything, confirm your dates with Social Security at 1-800-772-1213. Get your plan administrator’s answer in writing too.
The Rule Behind Cobra And Medicare
Medicare’s payer order turns on one number: how many people your employer employs. Start with the Medicare Secondary Payer rules. If the employer has 20 or more employees, the group health plan pays first. Medicare pays second. If the employer has fewer than 20 employees, Medicare pays first. CMS explains the working-aged provisions on its Medicare Secondary Payer page.
That protection only applies to coverage based on current employment. This is where cobra and medicare separate. COBRA continues a plan after the job ends. The employment is over. So the plan is no longer primary for someone 65 or older who is eligible for Medicare.
In practice, Medicare becomes the primary payer and COBRA becomes secondary. Many COBRA plans then pay only what they would owe after Medicare. If you never enrolled in Part B, no one pays the Part B share. You do. That gap is the first cost of getting cobra and medicare wrong.
Medicare states the point plainly on its COBRA coverage page. COBRA and retiree plans are not coverage based on current employment. That one sentence is the whole cobra and medicare problem.
Your Choices at 65
Your window depends on the kind of coverage you actually have. Active coverage at a large employer gives you a Special Enrollment Period. The 8-month Part B SEP starts the month after employment ends. If the group coverage ends first, it starts the month after that. Electing COBRA does not restart the clock and does not pause it.
The table below is the cobra and medicare decision in one place. It is a starting point, not a ruling on your plan. Verify your employer’s size with HR. Part-time staff and multi-employer plans change the count.
| Employer size / situation | Who pays first | What to do |
|---|---|---|
| Still working, employer has 20+ employees | Group health plan first, Medicare second | You may delay Part B. Keep proof of coverage for the CMS-L564 later. |
| Still working, employer has fewer than 20 employees | Medicare first, group plan second | Ask HR in writing whether the plan requires Part B. Most do. |
| Job ended, offered COBRA, age 65+ | Medicare first, COBRA second | File for Part B during the 8-month SEP. Do not wait for COBRA to run out. |
| Already on COBRA, no Part B | Medicare would pay first if you were enrolled | Call Social Security now. Ask which enrollment period you are still in. |
| Retiree coverage instead of COBRA | Medicare first, retiree plan second | Treat it like COBRA. It is not current employment coverage. |
| Spouse still working, spouse’s employer has 20+ employees | Spouse’s plan first, Medicare second | The SEP runs off the spouse’s job. The CMS-L564 goes to that employer. |
Medicare’s Who pays first page covers more situations. Disability and end-stage renal disease follow different thresholds.
The Penalty If You Get It Wrong
The penalty math is what makes a cobra and medicare error expensive. The Part B late enrollment penalty is 10% of the standard premium. You owe that 10% for each full 12-month period you could have had Part B and did not. The standard Part B premium is $202.90 per month in 2026, per the CMS 2026 premiums fact sheet.
The 2026 Part B deductible is $283. Now do the arithmetic. Two full years late means a 20% penalty. At the 2026 standard premium that is roughly $40.58 added every month. Three years late means 30%. The penalty is figured against the standard premium each year, so it rises as the premium rises.
The Part B penalty lasts as long as you have Part B. For most people that means life. It does not expire after a set number of years. Paying it does not buy back the months you missed.
Part D carries its own penalty. It equals 1% of the national base beneficiary premium times each full month without creditable drug coverage. That base is $38.99 for 2026. Twelve uncovered months works out near $4.70 per month, rounded to the nearest dime. Medicare’s Part D late enrollment penalty fact sheet shows the formula.
The Part D penalty also lasts as long as you have drug coverage. Ask your plan for its annual creditable coverage notice and keep it. That notice is what proves you were covered.
Cobra And Medicare: the Paperwork
Two forms carry almost all of the weight in a cobra and medicare situation. Neither is long. Both are easy to file late.
Form CMS-40B, Application for Enrollment in Medicare Part B. You sign this one yourself. It is the application, used when you already have Part A and want to add Part B. The form sits on the CMS website. In the remarks box, write the month your group coverage ended.
Form CMS-L564, Request for Employment Information. You complete Section A. Your employer or the plan administrator completes and signs Section B. A COBRA administrator generally cannot sign it, because COBRA is not current employment. The form is on the CMS forms page.
Send both to Social Security together. You can upload, fax, or deliver them to a local office. See Social Security’s How to Apply for Medicare Part B During Your Special Enrollment Period. Ask for a receipt or confirmation number every time.
Timing matters more than neatness. File inside the 8-month SEP. Suppose a former employer will not sign the CMS-L564. Ask Social Security what other proof it accepts. Pay stubs or a plan letter may work. Do not skip the form.
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The Traps People Fall Into
The first trap is treating COBRA as a bridge. It is not. The 8-month clock started when the job or the plan ended, not when COBRA ends. People on 18 months of COBRA often learn the window closed months earlier.
The second trap is retiree coverage. It carries the same cobra and medicare risk. It does not create a Part B Special Enrollment Period when it ends. It usually pays after Medicare.
The third trap is the health savings account. Once you are enrolled in Medicare, your HSA contribution limit is zero starting that month. IRS Publication 969 says this applies to retroactive Medicare coverage as well. Social Security may backdate Part A when you enroll after 65. Confirm your exact retroactive date with Social Security first.
Contributions made during a retroactive month become excess contributions. Excess amounts are reported on Form 5329 and can carry a 6% excise tax. Form 8889 reports your HSA activity for the year. Ask a tax preparer about your own return.
The fourth trap is the small employer. Under 20 employees, Medicare pays first from the month you are eligible. Delaying Part B there can leave most of a hospital bill unpaid. CMS describes a narrow Small Employer Exception. Ask your plan whether it applies to you.
The fifth trap is silence. Nobody is required to warn you about cobra and medicare timing. Read the plan document. Ask HR to answer in writing.
Frequently Asked Questions
Does electing COBRA extend my Part B enrollment window?
No. Medicare states that COBRA does not extend the time to sign up for Part B. The 8-month SEP runs from the end of employment or the group plan, whichever comes first. This is the central cobra and medicare mistake.
Can my COBRA plan drop me if I enroll in Medicare?
It can, in some cases. If you become entitled to Medicare after electing COBRA, the plan may end your COBRA coverage. Rules differ for spouses and dependents. Ask your COBRA administrator for the plan language in writing before you file.
Who signs the CMS-L564 if my former employer no longer exists?
Contact Social Security and explain the situation. Ask what alternative proof of employment and coverage it will accept. Do not assume a COBRA election notice is enough on its own.
Should I keep contributing to my HSA while on COBRA at 66?
Only if you are enrolled in no part of Medicare. Part A alone ends your eligibility to contribute. Because Part A can be backdated, confirm the effective date with Social Security first. Then ask a tax professional how cobra and medicare timing affects your HSA year.
Key Takeaways: Cobra And Medicare
- Employer size decides everything. Whether cobra and medicare is a choice or a requirement turns on the 20-employee rule.
Compare Your Options
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Official Sources & Resources
- Social Security — Medicare enrollment: https://www.ssa.gov/medicare
- IRS Publication 969 (HSAs): https://www.irs.gov/publications/p969
- Medicare.gov: https://www.medicare.gov
- CMS.gov: https://www.cms.gov
- Find your SHIP counselor: https://www.medicare.gov/talk-to-someone
Checked against the official sources above in September 2026. Rules and dollar figures change; if a notice you received disagrees with this page, the notice wins — and please tell us. General information, not legal, financial or medical advice.