MSP Primary/Secondary Rules
| Situation | Primary Payer | Secondary Payer |
|---|---|---|
| Active employee (any age), employer 20+ employees | Employer plan | Medicare |
| Active employee (any age), employer <20 employees | Medicare | Employer plan |
| ESRD, first 30 months | Employer plan (20+ employees) | Medicare |
| ESRD, after 30 months | Medicare | Employer plan |
| Disability, employer 100+ employees | Employer plan | Medicare |
| Disability, employer <100 employees | Medicare | Employer plan |
| Retiree | Medicare | Employer plan (if any) |
The 20-Employee Rule
For employees who are Medicare-eligible due to age (65+), the employer plan is primary if the employer has 20 or more employees. If the employer has fewer than 20 employees, Medicare is primary. The 20-employee threshold is based on the number of employees on each working day in 20 or more calendar weeks in the current or preceding year.
MSP Compliance Importance
Compliance Note
MSP violations are serious. An employer plan that improperly makes Medicare the primary payer for an active employee can be liable for double damages — twice the amount Medicare paid that should have been paid by the employer plan. The employer can also be subject to civil monetary penalties of $1,000 per day per violation. MSP compliance requires careful coordination with Medicare and accurate employee status tracking.