Can You Drop Medicare Part B?

You can drop Part B without penalty when you are actively employed (or covered through a working spouse) at a company with 20 or more employees and enrolled in that employer's group health plan. This is the only common scenario where dropping Part B is safe.

The key word is 'actively employed.' This means you or your spouse must currently be working at the company providing the coverage. Retiree benefits, COBRA continuation, and individual marketplace plans do not count, even if they provide comprehensive coverage.

When you drop Part B under these conditions, you are protected by a Special Enrollment Period that gives you 8 months to re-enroll after the employer coverage ends. As long as you re-enroll within that window, you pay no penalty and coverage begins the first of the month after enrollment.

To disenroll from Part B, contact Social Security directly. You can call 1-800-772-1213 or visit your local Social Security office. Keep all documentation of your employer coverage, including enrollment confirmation letters and the dates your coverage was active. You will need these when you re-enroll.

If your employer has fewer than 20 employees, do not drop Part B. Under the Medicare Secondary Payer rules, Medicare is primary for employees at small companies. The employer plan is designed to supplement Medicare, not replace it. Without Part B active, the employer plan calculates what Medicare would have paid and then pays only the remainder. In most cases, this leaves you with a very large bill.

Do not drop Part B if you are on COBRA. COBRA is continuation coverage, not active employment coverage. Medicare does not recognize COBRA as qualifying coverage for a penalty-free delay. If you drop Part B while on COBRA, you will owe the late enrollment penalty when you eventually re-enroll.

Do not drop Part B if your only other coverage is VA benefits. While VA healthcare is excellent, it does not qualify as creditable coverage for the purpose of delaying Part B enrollment. Veterans who drop Part B and later need non-VA care will face both a coverage gap and a permanent penalty.

Do not drop Part B if you are self-employed or purchasing individual health insurance through the marketplace. Individual plans are not employer group health plans and do not qualify for penalty-free Part B delay, regardless of how comprehensive the coverage is.

If you dropped Part B while covered by a qualifying employer plan, you have an 8-month Special Enrollment Period to re-enroll once that employer coverage ends. The 8-month clock starts the month after your employment ends or the month after your employer coverage ends, whichever comes first.

To re-enroll, contact Social Security and request enrollment under the SEP. You will need to provide proof that you had continuous employer coverage. This typically means a letter from your employer or HR department confirming your coverage dates. CMS Form CMS-L564 (Request for Employment Information) is the standard form used for this purpose.

If you miss the 8-month SEP window, your only option is the General Enrollment Period, which runs January 1 through March 31 each year. Coverage under the GEP does not begin until July 1, creating a potential gap of several months. You will also owe the Part B late enrollment penalty, which adds 10% to your monthly premium for each full 12-month period you were without Part B coverage.

Part B coverage under the SEP typically starts the first of the month after you enroll. There is no waiting period if you enroll promptly. Set a calendar reminder the day your employer coverage ends so you do not miss the deadline.

If you have a Medigap (Medicare Supplement) plan, dropping Part B means losing your Medigap coverage. Medigap plans require active Part B enrollment to function. When Part B ends, your Medigap plan terminates. Getting back into a Medigap plan later may require medical underwriting in most states, which means you could be denied or charged higher premiums based on your health.

If you have a Medicare Advantage plan, you cannot keep it without Part B. Medicare Advantage requires enrollment in both Part A and Part B. Dropping Part B automatically disenrolls you from your Medicare Advantage plan.

If you have a standalone Part D drug plan, dropping Part B does not directly affect your Part D enrollment. However, if your employer plan includes creditable drug coverage, you may choose to drop Part D as well. Confirm that the employer drug coverage is creditable before making this decision to avoid a Part D late enrollment penalty.

The most important consideration for most people is the Medigap risk. If you are going back to work on Medicare and considering dropping Part B, think carefully about whether you can get your Medigap plan back when you return. In most states, the answer is not guaranteed.