COBRA and Medicare Eligibility

Understanding how COBRA coverage works when you’re eligible for Medicare can help you make informed choices about your health insurance coverage. The rules around COBRA and Medicare can affect your access to benefits, coverage timing and costs.

What is COBRA?

COBRA (the Consolidated Omnibus Budget Reconciliation Act) allows people to keep their employer group health plan after leaving a job or experiencing another qualifying event. This federal health insurance program is available through employers with 20 or more employees.

If you’re eligible for COBRA, you can typically continue your health care coverage for up to 36 months. Some states also offer mini COBRA laws for smaller employers, which may have different rules.

What happens when you're eligible for Medicare?

When you become eligible for Medicare, your options for COBRA coverage may change. In most cases, Medicare becomes your primary insurance and your COBRA plan becomes secondary.

If you don’t enroll in Medicare when you’re first eligible, you may lose your COBRA coverage early. The Centers for Medicare & Medicaid Services (CMS) recommends signing up for Medicare during your initial enrollment period to avoid coverage gaps and enrollment penalties.

Can I have both COBRA and Medicare?

Yes, but there are important things to know:

• If you become eligible for Medicare before you choose COBRA, you can still sign up for COBRA to cover services that Medicare doesn’t.
• If you choose COBRA before becoming eligible for Medicare, your COBRA plan may end when Medicare begins.
• Your spouse and dependents may still qualify for COBRA coverage for up to 36 months, even if yours ends.

Special enrollment periods

You may qualify for a special enrollment period to enroll in Medicare without penalty after your COBRA coverage ends. However, COBRA is not considered creditable coverage for delaying Medicare Part B, so it's important to review your timeline closely.

COBRA vs. Medicare: Key considerations

When comparing COBRA coverage to Medicare:

• COBRA may cost more because you pay the full premium, including what your insurance company previously covered.
• Medicare may offer more comprehensive medical insurance benefits depending on your needs.
• The primary insurance and COBRA rules can be complex. Medicare is typically primary once you're eligible.

If you’re approaching age 65 or have a disability, talk to your employer or benefits advisor about the best path forward. The Centers for Medicare & Medicaid Services offers detailed guidance on how Medicare and COBRA work together.