Key Takeaways
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COBRA coverage does not count as creditable coverage to delay Medicare enrollment without penalties. If you wait too long, you could face late enrollment penalties and gaps in coverage.
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In 2025, timing is everything: If you are nearing age 65 or already eligible for Medicare, relying solely on COBRA could lead to serious enrollment pitfalls unless you understand how both programs interact.
Understanding the Basics: What COBRA Covers
COBRA, or the Consolidated Omnibus Budget Reconciliation Act, allows you to keep your employer-sponsored health insurance after leaving a job. This temporary coverage can last up to 18 months for most people, or longer in certain circumstances such as disability or secondary qualifying events. It gives you continued access to the same health plan you had through your employer, but typically at full cost to you.
However, this continuity can be misleading if you’re approaching Medicare eligibility.
COBRA’s Limitations with Medicare
While COBRA can bridge the gap between employer coverage and Medicare, it’s not always a safe or reliable option. Here’s why:
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COBRA is not creditable coverage for delaying Medicare Part B without penalty.
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You may lose COBRA early if you become eligible for Medicare while already on COBRA.
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You are responsible for enrolling in Medicare during your Initial Enrollment Period (IEP), even if you have COBRA.
Your Medicare Initial Enrollment Period (IEP)
If you’re approaching 65, your Initial Enrollment Period spans seven months: three months before your 65th birthday, your birthday month, and three months after. During this window, you can enroll in Medicare Part A and/or Part B.
What Happens If You Miss Your IEP?
Failing to enroll in Medicare during your IEP because you assumed COBRA was sufficient could result in:
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A late enrollment penalty that adds 10% to your monthly Part B premium for each full 12-month period you were eligible but didn’t enroll.
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Coverage delays, as you’d have to wait for the next General Enrollment Period (January 1 to March 31), with coverage beginning July 1.
Can You Delay Medicare If You Have COBRA?
The answer is no—COBRA does not qualify you for a Special Enrollment Period (SEP) to delay Medicare without penalty. Only active employment-based insurance lets you delay enrollment in Medicare Part B without facing a penalty.
If you’re retired or no longer working and only have COBRA, you must enroll in Medicare when you’re first eligible.
Coordination of COBRA and Medicare
If you already have Medicare when you become eligible for COBRA:
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Medicare is primary, and COBRA becomes secondary.
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COBRA can help cover costs that Medicare doesn’t, such as deductibles and coinsurance.
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You should not drop Medicare in favor of COBRA.
If you get COBRA before enrolling in Medicare:
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You must still sign up for Medicare during your IEP.
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COBRA may end when your Medicare starts, depending on your plan’s rules.
Enrolling in Medicare While on COBRA
If you’re on COBRA and become eligible for Medicare:
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You should enroll in Medicare Part A and B as soon as your IEP begins.
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Failing to do so means Medicare may charge you late enrollment penalties later.
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You might also be left with no primary insurance coverage, as COBRA may refuse to pay claims once Medicare eligibility begins.
Common Misconceptions in 2025
1. COBRA Extends Your Employer Insurance Just Like Before
This is false. While COBRA continues the same insurance coverage you had as an employee, it does not preserve your Medicare enrollment rights. You’re no longer considered an active worker, so your IEP still applies.
2. I Can Wait to Get Medicare Until My COBRA Ends
Waiting until COBRA runs out could be costly. The government does not offer a Special Enrollment Period when COBRA ends unless you also had coverage through active employment.
3. Medicare Will Automatically Enroll Me at 65
Automatic enrollment in Medicare happens only if you’re already receiving Social Security benefits. If not, you must actively enroll during your IEP.
Paying the Price: What Delayed Enrollment Could Cost You
Late Enrollment Penalties
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Part B penalty: 10% added to your monthly premium for each 12-month delay.
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Penalties are permanent and apply for the duration of your Medicare coverage.
Gaps in Coverage
If you miss your IEP and have to wait until the next General Enrollment Period, you could go months without health insurance. This can be financially devastating in the event of a serious illness or hospitalization.
Special Enrollment Period (SEP): Who Qualifies?
You qualify for a SEP if you delay Medicare enrollment because you (or your spouse) have active employment-based health coverage. Once that coverage ends, you get an 8-month SEP to sign up for Medicare.
But COBRA is not considered active employment-based coverage.
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COBRA does not trigger a SEP.
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You will not be protected from penalties if you delay Medicare and only have COBRA.
Best Practices for 2025: Coordinating COBRA and Medicare Wisely
Enroll in Medicare During Your IEP
If you are turning 65 or are already eligible:
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Enroll in Part A (hospital insurance), which is usually premium-free if you worked enough quarters.
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Enroll in Part B (medical insurance) unless you have employer-based coverage through active employment.
Use COBRA as Secondary Coverage
If you already have Medicare:
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COBRA may help pay for what Medicare doesn’t cover.
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Review your COBRA plan’s rules on coordination with Medicare to ensure it continues once Medicare starts.
Reevaluate Drug Coverage
COBRA coverage might include prescription benefits, but make sure it’s creditable (as good as or better than Medicare Part D) to avoid future penalties. If not, you’ll need to enroll in a separate Medicare drug plan within your IEP.
Key Timelines to Remember in 2025
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Initial Enrollment Period (IEP): 3 months before to 3 months after your 65th birthday.
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General Enrollment Period (GEP): January 1 to March 31. Coverage starts July 1.
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No SEP from COBRA: COBRA does not give you a late-enrollment exception.
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COBRA duration: Typically 18 months, or up to 36 months in extended cases.
Avoiding Mistakes That Can Derail Your Retirement Coverage
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Don’t assume COBRA replaces Medicare—it doesn’t.
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Don’t wait for Medicare to automatically enroll you—check your eligibility and act.
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Don’t delay Medicare because COBRA seems more familiar or easier to maintain.
What This Means for You Right Now
If you’re approaching Medicare eligibility in 2025 and currently covered by COBRA, it’s time to plan. Medicare’s rules are strict, and assuming that COBRA gives you flexibility could lead to higher costs and gaps in care.
Speak with a licensed agent listed on this website to get help reviewing your timeline, comparing your options, and ensuring you don’t miss key deadlines. It’s better to act now than pay penalties for years to come.
