What Employers Need to Know When Their Employees Become Medicare-Eligible

As more Americans choose to stay in the workforce beyond age 65, employers are increasingly navigating questions about Medicare eligibility, compliance, and cost implications. Whether you’re leading a small business or managing HR for a growing organization, understanding how Medicare interacts with your group health plan is critical—not only to stay compliant but also to support your employees in making informed decisions.

Below, we break down some of the most common questions employers have when their workforce approaches Medicare eligibility and how OneDigital Advanced Health can help.

At what age do employees become eligible for Medicare?

Employees generally become eligible for Medicare at age 65. At this point, many will begin asking questions about whether they need to enroll, what it means for their current group health plan, and what coverage options are available. This milestone gives employers the opportunity to guide employees through their options—while managing long-term cost and compliance concerns.

How does employer size affect Medicare requirements?

Under 20 Employees:

Medicare becomes the primary payer at age 65, and employers must ensure employees enroll in Part A and B. Group coverage becomes secondary.

• Real World Compliance Risk

  In one case, a 67-year-old lawyer working at a small firm with fewer than 20 employees, delayed Medicare enrollment, assuming her employer's health insurance would remain primary after turning 65. Following an audit after a costly medical incident, the insurer determined it had paid improperly and began clawing back over $50,000 from healthcare providers, who then sought payment from her.

20 or More Employees:

Employees can usually stay on the group plan, and Medicare becomes secondary. Part B enrollment is optional while still working.

• Important note:

  Employers cannot incentivize employees to drop group coverage in favor of Medicare, but they can provide education on available options.

What about employees with dependents?

Employees often make Medicare decisions not just for themselves but in the context of their family’s health coverage. This is especially relevant when a 65-year-old employee is covering a spouse or dependent on the employer-sponsored group plan.

For example, an employee who is the primary subscriber on the group health plan and is covering a younger spouse may choose to delay Medicare enrollment to maintain uninterrupted coverage for the spouse. Alternatively, if the spouse is the primary subscriber and the Medicare-eligible employee is listed as a dependent, Medicare enrollment might be more appropriate—or even necessary—depending on the group size and coordination rules.

Understanding who “owns” the group coverage is important for several reasons:

• If the employee is the policyholder: Delaying Medicare may make sense for dependent coverage but could trigger penalties if Medicare should be primary.
• If the spouse is the policyholder: Medicare might still need to be primary for the employee, depending on group size.

Late enrollment can result in penalties or gaps, especially if coverage ends unexpectedly. That’s why it’s important to offer personalized guidance that considers household dynamics.

Why should employers care about Medicare education?

Medicare is an important part of your benefits lifecycle. Providing education around it helps employees make informed decisions that support their individual health and financial needs, while also contributing to the long-term sustainability of your organization’s health plan. Proactive education helps:

• Prevent claim issues and coverage disruptions
• Build trust and satisfaction in your benefits program
• Identify cost-saving opportunities for both the employee and employer

What Employers Can Do:

• Add a dedicated Medicare resource to your benefits package to deliver virtual or on-site education sessions.
• Provide employees access to one-on-one guidance who can walk them through eligibility, enrollment, and dependent coordination, without adding to your HR team’s workload.
• Communicate early and often, helping employees prepare in advance for key milestones like turning 65 or open enrollment.

How OneDigital Advanced Health Can Support Your Organization

We partner with employers to deliver personalized Medicare education and compliance support—meeting employees where they are and reducing the burden on HR.

We help employers:

• Navigate Medicare rules based on your business size and industry
• Deliver group and individual education tailored to real-life family and coverage scenarios
• Support confident, timely decisions about Medicare enrollment
• Avoid costly oversights tied to Medicare coordination
• Develop strategies that align cost containment with care continuity

Ready to Support Your People With Confidence?

Visit the OneDigital Advanced Health page and complete the form to connect with our team. We’ll help you deliver personalized Medicare education and guidance to support your employees—and your organization—every step of the way.