The 20-Employee Rule
Whether your employer plan is your primary or secondary coverage at age 65 depends on a single threshold: does your employer have at least 20 employees?
| Employer Size | Primary Payer | What This Means |
|---|---|---|
| 20+ employees | Employer plan | Medicare pays second. You can safely delay Part B. |
| Fewer than 20 | Medicare | You MUST enroll in Part A and Part B at 65 to avoid coverage gaps. |
The COBRA Trap
Many Californians believe COBRA continuation coverage will protect them from Medicare late enrollment penalties. It does not.
COBRA is not considered “current employment-based coverage” for Medicare purposes. If you go on COBRA after leaving employer coverage and delay Part B, you’ll face the 10% per year permanent penalty when you eventually enroll. The 8-month Special Enrollment Period clock starts when your active employer coverage ends — not when COBRA ends.
UC, CalPERS, and Other CA Public Sector
If you work for the University of California, a CalPERS employer, or another California public agency, your retiree health benefits may require Medicare Part B enrollment to remain in effect after retirement. Contact your benefits office before age 65 to understand the specific coordination rules.
Form CMS-L564 — Your Proof of Coverage
When you eventually enroll in Part B, you’ll need to submit Form CMS-L564 (Request for Employment Information). Your employer’s HR department fills out this form to verify the dates you had employer health coverage. This is your proof that you qualify for the 8-month Special Enrollment Period without penalty.