If you have health insurance through your employer at age 65, you may be able to delay Medicare enrollment without penalty. But the rules depend critically on your employer's size, and one of the biggest mistakes New Mexicans make is assuming COBRA counts as creditable coverage—it does not.
The 20-Employee Rule
The size of your employer determines whether Medicare or your employer plan pays first:
| Employer Size | Primary Payer | Should You Take Part B? |
|---|---|---|
| 20 or more employees | Employer plan pays first | Usually delay Part B to avoid premiums |
| Fewer than 20 employees | Medicare pays first | Yes—enroll in Part B at 65 |
Critical: If you work for a company with fewer than 20 employees and delay Part B, your employer plan can refuse to pay claims that Medicare would have covered. You'd be responsible for 100% of the costs.
The COBRA Myth
Many New Mexicans believe COBRA counts as "current employer coverage" for Medicare purposes. It does not. COBRA is not considered active employer coverage by Medicare, which means:
- COBRA does not entitle you to a Special Enrollment Period for Part B
- If you have COBRA at 65 and don't enroll in Part B, you'll face permanent late penalties
- Medicare pays first; COBRA pays second (if at all)
- You should enroll in Part B during your Initial Enrollment Period, not wait until COBRA ends
Federal Employees: Different Rules
For New Mexico's federal workforce (Kirtland AFB, White Sands, DOE/NNSA and other federal agencies), FEHB follows the same current-employment rule, with a few details to know. LANL and Sandia employees work for the labs' contractors and generally have the contractors' plans, not FEHB.
- While you are still a federal employee, FEHB is current-employment coverage, so you can delay Part B and use the 8-month SEP when you retire
- After retirement, FEHB does not protect you: a later Part B means the General Enrollment Period and a permanent late penalty
- However, adding Part A is recommended (it's free for most)
- Adding Part B at retirement can significantly reduce out-of-pocket costs
See our full FEHB & Medicare guide →
Self-Employed and Marketplace Coverage
If you're self-employed or have ACA Marketplace coverage at 65, neither counts as "current employer coverage" for Medicare. You should enroll in Medicare Parts A and B during your Initial Enrollment Period to avoid late penalties.
Coordination of Benefits: How It Works
When you have both Medicare and an employer plan, claims are processed in a specific order:
- Your provider sends the bill to the primary payer first
- The primary payer covers their portion based on the plan's rules
- The secondary payer covers some or all of the remaining balance
- You pay any leftover amount
Generally, having both Medicare and a strong employer plan minimizes your out-of-pocket costs significantly.
Don't Guess—Get Expert Help
Coordination-of-benefits decisions for working New Mexicans depend on dozens of variables. A licensed Medicare agent can review your specific employer plan and recommend the right Medicare strategy.