Medicare and COBRA: The Part B Trap Florida Retirees Need to Know
Eight months. That's how long you have to sign up for Medicare Part B without a penalty once your job, or the health coverage from that job, ends. Taking COBRA doesn't stretch that window by a single day. Medicare & You 2027 says it in one line: you have 8 months after coverage based on current employment ends, whether or not you choose COBRA.
COBRA lets you keep your old employer plan for 18 months or longer after you leave. It feels like nothing changed. For Medicare, almost everything changed. Once you're 65 or older and eligible for Medicare, COBRA pays after Medicare, it isn't "current employment" coverage, and when it ends you generally get no new chance to pick up Part B. People who learn this when the COBRA letters stop can face a gap in coverage and a Part B penalty they pay for as long as they have Part B.
This matters a lot in Florida. The Census Bureau estimates 5,346,788 Floridians were 65 or older on July 1, 2025, which is 22.8% of the state, against 18.9% nationally. Plenty of them retire from a job, get the COBRA packet in the mail, and have to make this call within weeks.
Source: CMS, Medicare & You 2027, pp. 18-19; CMS, How Medicare Works with Other Insurance (02179, Feb. 2026), p. 7; Medicare.gov, Avoid late enrollment penalties; U.S. Census Bureau, Vintage 2025 state population estimates.
Why COBRA doesn't count as job coverage
Medicare lets you delay Part B without a penalty only while you're covered by a group health plan based on current employment, meaning you or your spouse are still working for the employer that provides the plan. That's written into federal rules: 42 CFR 407.20 requires the coverage to be "by reason of the current employment status" of you or your spouse, and 42 CFR 406.24 says the "former employee" language in the group plan definitions doesn't apply to this Special Enrollment Period.
COBRA is coverage for former employees. Same insurance card, same network, same deductible, but legally it's a different thing. Here's how the two compare where it matters for Medicare.
| Coverage from a current job | COBRA after the job ends | |
|---|---|---|
| Counts for the Part B Special Enrollment Period? | Yes | No |
| Who pays first at 65+ (age-based Medicare) | Job plan, if the employer has 20+ employees; Medicare, if under 20 | Medicare |
| New Part B window when it ends? | Yes, 8 months | Generally no |
| How long it lasts | As long as you (or your spouse) work there and the plan continues | Usually 18 months; 36 in some cases |
| What you pay | Your share of the premium, as set by the employer | Up to 102% of the full plan cost |
| Ends when you enroll in Medicare? | No (employers with 20+ can't treat 65+ workers differently) | It can, if Medicare starts after you elect COBRA |
| Creditable drug coverage for Part D? | If the plan says so in its yearly notice | If the plan says so; you get a Part D window when it ends |
Source: CMS, Medicare & You 2027, pp. 18-19 and 93; CMS, How Medicare Works with Other Insurance (02179, Feb. 2026), pp. 4-8; 29 U.S.C. 1162; U.S. Department of Labor, An Employee's Guide to Health Benefits Under COBRA.
Medicare & You 2027 lists what "active employer or union coverage" does not include: COBRA or similar continuation coverage, retiree coverage, VA coverage, Marketplace or other individual coverage, and former-employer coverage you get through severance or a layoff. That last one catches people too. A severance package that keeps you on the company plan for six months is still not current employment.
The 8-month clock starts the month after the employment ends or the coverage ends, whichever happens first. For most retirees, the job ends first, so the clock is running while COBRA is still in place. If you miss it, the next chance is the General Enrollment Period (January 1 to March 31), and coverage starts the month after you sign up. For more on the window itself, see Medicare Special Enrollment Periods.
Who pays first
"Pays first" (primary) means that coverage pays its share of the bill before anyone else. The secondary coverage only looks at what's left, and it may not pay all of that.
| Your situation | Pays first | Pays second |
|---|---|---|
| 65 or older, Medicare because of age, on COBRA | Medicare | COBRA |
| Under 65, Medicare because of a disability, on COBRA | Medicare | COBRA |
| Medicare because of end-stage renal disease (ESRD), on COBRA, first 30 months of Medicare eligibility | COBRA | Medicare |
| ESRD, after the 30-month coordination period | Medicare | COBRA |
| Still working, 65+, employer with 20+ employees (for comparison) | Job plan | Medicare |
| Retiree coverage from a former employer (for comparison) | Medicare | Retiree plan |
Source: CMS, How Medicare Works with Other Insurance (02179, Feb. 2026), pp. 4-8 and 12.
The ESRD row is the one exception. If you qualify for Medicare because of permanent kidney failure, COBRA keeps paying first during a coordination period that lasts up to 30 months after you're first eligible for Medicare, and the 8-month Special Enrollment Period described above doesn't apply to ESRD-based Medicare at all. One wrinkle from CMS: if you first got Medicare because of age (or a non-ESRD disability) and later develop ESRD, whichever coverage was paying first keeps paying first. That's a different set of decisions, and worth a call to SHINE before you act.
For everyone with Medicare based on age or disability, the practical problem is this: a COBRA plan is built to sit behind Medicare. If you're eligible for Medicare but haven't enrolled, Medicare.gov warns that COBRA may only pay a small portion of your care, and you may have to pay most of the costs yourself. Its advice is to call your COBRA plan and ask what percent it pays. Ask that question in writing, before you elect, and keep the answer.
Questions about who pays first go to the Benefits Coordination & Recovery Center at 1-855-798-2627 (TTY 1-855-797-2627).
A dated example: the COBRA-first mistake
Hypothetical. Say Carol lives in Sarasota. She turned 65 in 2025, signed up for premium-free Part A, and kept working for a company with 200 employees, so her job plan paid first and she skipped Part B. Her last day of work and last day of the job plan are both March 31, 2027. She elects COBRA, which runs 18 months, through September 30, 2028.
| Date | Path A: Part B on time | Path B: waits for COBRA to end |
|---|---|---|
| Before March 31, 2027 | Signs up for Part B while still covered at work, starting April 1 | Elects COBRA, no Part B |
| April 1 - November 30, 2027 | Medicare pays first, COBRA second | 8-month Part B window runs out November 30 |
| April 2027 - September 2028 | COBRA fills some gaps behind Medicare | COBRA pays second with no Medicare in front of it |
| October 1, 2028 | COBRA ends; Medicare keeps paying first, no Part B gap | COBRA ends; no Part B, no Special Enrollment Period |
| January 2029 | Signs up during the General Enrollment Period | |
| February 1, 2029 | Part B starts (4 months with only Part A after COBRA ends) | |
| Monthly Part B premium | Standard ($202.90 at 2026 rates) | Standard + 10% ($223.20 at 2026 rates), for as long as she has Part B |
Source: dates are a hypothetical example; rules from CMS, Medicare & You 2027, pp. 18-19; Medicare.gov, COBRA coverage; 42 CFR 408.24; 2026 premium from CMS 2026 Parts A & B fact sheet.
Why 10%? The Part B penalty is 10% of the standard premium for each full 12-month period you could have had Part B and didn't (42 CFR 408.22). Under 42 CFR 408.24, months covered by a plan based on current employment don't count against you, but COBRA months do. So in Carol's case the count starts in April 2027 and runs through January 2029, the month she signs up: 22 months, one full 12-month period. Had she waited until March 2029 to sign up, it would be 24 months, two full periods, and a 20% penalty. The actual figure is calculated from your own enrollment record, so treat this as a sketch of how the math works, not a quote.
Path B also has a quieter cost. For 18 months on COBRA, Carol had a plan designed to pay after Medicare and no Medicare Part B in front of it. Any doctor visit, scan or outpatient surgery in that stretch could have left her with most of the bill.
Source: Medicare.gov, Avoid late enrollment penalties; CMS 2026 Parts A & B fact sheet; writer arithmetic.
Show the numbers
| Monthly premium | |
|---|---|
| Signed up on time | $202.90 |
| 12-23 months late (+10%) | $223.20 |
| 24-35 months late (+20%) | $243.50 |
| 36-47 months late (+30%) | $263.80 |
At 2026 rates, with Medicare's rounding to the nearest $0.10, a 10% penalty adds about $20.30 a month, or about $244 a year, and it applies to each future year's standard premium, too. As of this writing, CMS hasn't announced the 2027 Part B premium; the 2026 figures came out November 14, 2025. For the full mechanics of all three Medicare penalties, see how the late enrollment penalties are calculated.
Order matters: Medicare first, or COBRA first?
Federal COBRA law lets the plan end your COBRA coverage on the date you first become entitled to Medicare after you elect COBRA (29 U.S.C. 1162(2)(D)). The Department of Labor's COBRA guide spells out both sides:
- Medicare already in place when you elect COBRA. If Part A or Part B is effective on or before the date you elect COBRA, the plan can't end your COBRA coverage because of Medicare, even if you enroll in the other part later. Carol had Part A since 2025, so adding Part B in 2027 doesn't cost her the COBRA she elected.
- Medicare starts after you elect COBRA. If you enroll in Part A or Part B before your COBRA ends, the plan may terminate your COBRA coverage. Medicare.gov puts it more bluntly: if you have COBRA before signing up for Medicare, your COBRA will probably end once you sign up.
Neither of these is a reason to skip Part B. If COBRA ends because you enrolled in Medicare, that's the system working as designed: Medicare becomes your main coverage and you add a Medigap policy or a Medicare Advantage plan and drug coverage around it. The mistake is the reverse, keeping COBRA and skipping Medicare to "save" COBRA.
A few COBRA mechanics worth knowing while you decide. The plan must give you at least 60 days to elect (29 U.S.C. 1165). It can charge up to 102% of the plan's full cost, and your first payment can't be required until 45 days after you elect (29 U.S.C. 1162(3)). Those 60 days are not a reason to wait on Part B: the 8-month Medicare clock is already running.
Your spouse and dependents
When one spouse retires onto Medicare and the other is younger, the younger spouse may still need the employer plan. Here COBRA can be very useful, and one rule works in the family's favor.
Under 29 U.S.C. 1162(2)(A)(vii), if the employee's job ends less than 18 months after the employee became entitled to Medicare, COBRA for the spouse and dependents can't end before 36 months from the date of that Medicare entitlement. The Department of Labor's COBRA guide lists "employee enrollment in Medicare" as giving the spouse and dependent children up to 36 months, with a footnote that the actual period depends on whether the Medicare entitlement came before or after the job ended.
| Hypothetical (job ends July 31, 2027) | Spouse's COBRA runs at least until |
|---|---|
| Employee's Medicare started January 2027 (7 months before the job ended) | End of December 2029 (36 months from January 2027) |
| Employee's Medicare started in 2024 (3 years before the job ended) | 18 months from the job ending (the 36-month rule doesn't apply) |
Source: 29 U.S.C. 1162(2)(A); U.S. Department of Labor, An Employee's Guide to Health Benefits Under COBRA. Dates are hypothetical.
The spouse's COBRA is separate from the retiree's Medicare decisions. The retiree still needs Part B within 8 months of the job ending. The younger spouse, once they turn 65, has their own Medicare enrollment to handle, and their COBRA (based on a former job, not a current one) won't let them delay Part B either. A divorce, a death or a child aging off the plan are also COBRA qualifying events under 29 U.S.C. 1163, and the maximum periods for those are longer.
If you're still working past 65 and wondering whether your current plan lets you wait, start with Medicare and employer coverage.
Drug coverage and Medigap timing
Part D. Drug coverage works more kindly with COBRA than Part B does. If your COBRA includes creditable drug coverage (expected to pay, on average, at least as much as standard Medicare drug coverage), you get a Special Enrollment Period to join a Medicare drug plan without a penalty when COBRA ends. Medicare.gov says that window lasts 2 full months after the month your employer or union coverage, including COBRA, ends. If the COBRA drug coverage is not creditable, the Part D penalty (1% of a national base premium for each month, triggered by a gap of 63 days or more) can start building while you're still on COBRA. Your plan sends a yearly creditable coverage notice; find it. More on drug plans: Medicare Part D in Florida.
Medigap. Your one-time, 6-month Medigap Open Enrollment Period starts the first month you have Part B and are 65 or older. During it, companies can't use medical underwriting to turn you down for a Medigap policy they sell. So when you take Part B at retirement, that 6-month clock starts too, COBRA or not. If you sit on COBRA for most of it, the window can close before you shop.
There's a backstop. If you have Original Medicare and an employer plan that pays after Medicare, including COBRA, and that plan ends, federal rules give you a guaranteed issue right to certain Medigap policies. You apply no more than 63 days after the latest of the date coverage ends, the date on the notice saying it's ending, or the date on a claim denial if that's how you found out. CMS's guide adds that with COBRA you can buy a Medigap policy right away or wait until COBRA ends. That right covers a narrower set of policies than open enrollment does, so read Florida's Medigap rules before you rely on it, and see Medicare Supplement insurance in Florida for how Medigap fits in.
| Deadline | Starts | Length | Does COBRA change it? |
|---|---|---|---|
| COBRA election | Later of coverage loss or the election notice | At least 60 days | n/a |
| Part B Special Enrollment Period | Month after the job or job coverage ends (whichever is first) | 8 months | No |
| Medigap Open Enrollment Period | First month with Part B at 65+ | 6 months | No |
| Medigap guaranteed issue when COBRA ends | Latest of coverage end, notice date or claim denial | 63 days | Created by COBRA ending (if COBRA paid after Medicare) |
| Part D Special Enrollment Period | After the month COBRA or job coverage ends | 2 full months | Yes, gives you this window |
Source: 29 U.S.C. 1165; CMS, Medicare & You 2027, p. 18; CMS, Choosing a Medigap Policy (02110, March 2026); Medicare.gov, Special Enrollment Periods.
Florida's mini-COBRA for small employers
Federal COBRA generally applies only to employers with 20 or more employees. Florida fills part of that gap with the Florida Health Insurance Coverage Continuation Act, s. 627.6692, Florida Statutes. It covers insured group health plans of small employers, defined in that section as employers with fewer than 20 employees, and it doesn't apply when federal COBRA does.
The Florida version differs from federal COBRA in ways that matter for Medicare:
| Federal COBRA (20+ employees) | Florida continuation (under 20) | |
|---|---|---|
| Basic length after a job ends | 18 months | 18 months |
| Disability extension | 29 months total (up to 150% premium after month 18) | 29 months total (up to 150% premium during the extra 11 months) |
| Maximum premium | 102% of plan cost | 115% of plan cost |
| Who you deal with | Plan administrator | The insurance carrier |
| Your deadlines | At least 60 days to elect | Notify the carrier in writing within 63 days of the event; elect and pay within 30 days of the carrier's notice |
| Ends at Medicare entitlement? | Yes, if Medicare starts after you elect | Statute lists the date you're entitled to Part A or Part B, with no before/after-election distinction |
| 36-month spouse rule after employee's Medicare | Yes | Not in the statute |
Source: 29 U.S.C. 1162; 29 U.S.C. 1165; s. 627.6692, Florida Statutes.
Two things stand out. First, under the Florida law you start the process: the qualified beneficiary has to give the carrier written notice within 63 days after the qualifying event, and the carrier then has 14 days to send the election form by certified mail. Miss your 63 days and you may have nothing to elect. Second, the Florida statute lets the carrier end continuation on the date you're entitled to Part A or Part B, and it doesn't carry the federal wording that protects people who already had Medicare before they elected. If you're 65+ and leaving a small Florida employer, ask the carrier in writing whether your continuation coverage will continue at all once your Medicare is in place.
And remember the small-employer rule on who pays first: when the employer has fewer than 20 employees, Medicare already pays first for a 65-year-old worker. If you skipped Part B at a small company, you may have had less coverage than you thought even before you left.
What I'd do before electing COBRA
If you're 65 or older (or will be soon) and leaving a job, here's the order I'd work in:
- Write down the date your job ends and the date your job coverage ends. The earlier one starts your 8-month Part B clock. Count 8 months from the following month and put the last day on your calendar.
- Sign up for Part B before or right at retirement. You can sign up while you're still covered at work and pick a start date that lines up with your last day on the plan. Your employer completes Section B of Form CMS-L564 to confirm the job coverage, which you send with Form CMS-40B; Medicare and employer coverage walks through the forms.
- Ask the COBRA plan, in writing, what it pays once you have Medicare, and whether its drug coverage is creditable. Keep the answers.
- Decide whether COBRA still earns its premium. At up to 102% of the full plan cost, it often makes most sense for a younger spouse or dependents, or as a short bridge, rather than as your own primary coverage.
- Line up Medigap or Medicare Advantage and drug coverage inside your 6-month Medigap window and the 2-month Part D window. See Medicare in Florida for how the pieces fit together in Florida.
- Small employer? Send the carrier written notice within 63 days under Florida's continuation law, and ask how it treats Medicare.
For 2026, the standard Part B premium is $202.90 a month and the Part B deductible is $283. Premium-free Part A costs most people nothing; CMS says about 99% of beneficiaries don't pay a Part A premium.
Your own plan documents, COBRA notices, Medicare notices and federal and Florida law control your situation. Confirm the details with a licensed agent, SHINE, Social Security or 1-800-MEDICARE before you act, and talk to an attorney for legal questions.
Sources
- CMS: How Medicare Works with Other Insurance (Product No. 02179, Feb. 2026)
- CMS: Medicare & You 2027 handbook
- Medicare.gov: COBRA coverage
- Medicare.gov: Avoid late enrollment penalties
- Medicare.gov: Special Enrollment Periods
- CMS: Choosing a Medigap Policy (Product No. 02110, March 2026)
- CMS: 2026 Medicare Parts A & B Premiums and Deductibles fact sheet (Nov. 14, 2025)
- U.S. Department of Labor, EBSA: An Employee's Guide to Health Benefits Under COBRA (Sept. 2022)
- 29 U.S.C. 1162: Continuation coverage (via Cornell LII)
- 29 U.S.C. 1163: Qualifying events (via Cornell LII)
- 29 U.S.C. 1165: Election period (via Cornell LII)
- eCFR: 42 CFR 406.24, Special enrollment period related to group health plans
- eCFR: 42 CFR 407.20, Part B special enrollment period
- eCFR: 42 CFR 408.22, Part B premium increase for late enrollment
- eCFR: 42 CFR 408.24, Months counted for the late enrollment increase
- CMS: Form CMS-L564, Medicare Request for Employment Information
- Florida Statutes s. 627.6692: Florida Health Insurance Coverage Continuation Act
- U.S. Census Bureau: Vintage 2025 state population estimates by age (sc-est2025-alldata6)
- Florida Department of Elder Affairs: SHINE
This article is for general educational purposes only and is not legal, tax or insurance advice. Coverage depends on the actual policy, its terms, conditions and exclusions, and state law. Maru Insurance · WA License (WAOIC) #1365574 · FL License #G363233 · NPN 22261820.