What
MSP rules determine when your group health plan (GHP) is primary and when Medicare pays secondary.
Who
All employers offering a GHP. Key thresholds: 20+ employees for working-aged (65+ based on current employment), 100+ employees for disability; ESRD has a 30-month coordination period regardless of employer size.
When
Review at renewal and whenever headcount or workforce facts change.
Risk
Wrong determinations can trigger Medicare recoveries, carrier reprocessing, and higher plan costs, and inaccurate or missing records raise CMS enforcement and carrier-audit exposure. Section 111 reporting failures carry civil money penalties of up to $1,512 per day per claimant (2026 amount, unchanged from 2025; adjusts annually for inflation; statutory base $1,000, 42 U.S.C. 1395y(b)(8)(E)(i)).
20+
Working-aged
At 20+ employees, the GHP is primary for working-aged (65+) enrollees based on current employment.
100+
Disability
At 100+ employees, the GHP is primary for disability-based Medicare enrollees.
30 mo
ESRD period
GHP is primary for the 30-month ESRD coordination period, regardless of employer size.
| Trigger | Timing | Who Sends | Notes |
|---|---|---|---|
| Annual MSP status check (headcount & categories) | At renewal / plan-year start | Employer / Plan Administrator | Confirm 20+ (working-aged) and 100+ (disability) thresholds; refresh carrier MSP questionnaires. |
| Headcount crosses 20 or 100 | As changes occur | Employer to Carrier / TPA (and RRE if applicable) | Update employer size indicator so primary/secondary status is correct. |
| New Medicare-eligible enrollee (age/disability) | At enrollment | Employer / Carrier | Apply working-aged (20+) or disability (100+) rule. |
| ESRD entitlement/eligibility identified | Start of 30-month coordination period | Employer / Carrier / Provider | GHP primary during CP; Medicare primary after CP ends. |
| Carrier MSP questionnaire or Section 111 data request | Upon request (RREs: quarterly) | RRE submits; employer supplies data | Provide accurate headcount/coverage info for proper coordination. |
Trigger: Annual MSP status check
Timing: At renewal / plan-year start
Notes: Confirm the 20+ and 100+ thresholds; refresh carrier MSP questionnaires.
Trigger: Headcount crosses 20 or 100
Timing: As changes occur
Notes: Update the employer size indicator with carrier/TPA (and RRE if applicable).
Trigger: New Medicare-eligible enrollee (age/disability)
Timing: At enrollment
Notes: Apply working-aged (20+) or disability (100+) rule.
Trigger: ESRD entitlement/eligibility identified
Timing: Start of 30-month coordination period
Notes: GHP primary during CP; Medicare primary after.
Trigger: Carrier MSP questionnaire or Section 111 data request
Timing: Upon request (RREs: quarterly)
Notes: Provide accurate headcount/coverage info for proper coordination.
- Employee counts (current & prior year): Support for 20+ and 100+ thresholds (include controlled group entities).
- Plan details: Sponsor/administrator, EIN, funding type, multi-employer or union/Taft-Hartley status.
- Enrollment roster: Who's Medicare-eligible and why (age, disability, ESRD); note current-employment vs. retiree status.
- MSP questionnaires / carrier forms: Latest versions, with response logs.
- Section 111 (if RRE): Contacts, file schedule, prior submission confirmations.
1
Identify the Medicare basisAge 65+ (working-aged), disability (under 65), or ESRD.
2
Apply the primary/secondary rule
- Working-aged: If any employer in a multi-employer plan has 20+ employees (or single employer has 20+), the GHP is primary; otherwise Medicare is primary.
- Disability: If any employer has 100+ employees (or single employer has 100+), the large GHP is primary; otherwise Medicare is primary.
- ESRD: GHP is primary for 30 months from coordination period start; afterward Medicare is primary. ESRD rules override other categories during the CP.
- Retirees: Coverage not based on current employment; Medicare is typically primary.
3
Document headcount methodUse consistent HRIS/payroll reporting; note controlled group aggregation.
4
Notify partnersUpdate carriers/TPAs (and RRE, if applicable) when thresholds or facts change.
5
Monitor ESRD timingTrack CP start/end; update vendors when status flips.
- To carriers/TPAs: Provide employer size and MSP category at renewal and upon request.
- Section 111 (GHP) reporting: If you or your TPA are the RRE, submit quarterly files with the correct employer size indicator.
- Internal: Ensure HR and payroll understand who is primary so claims adjudicate correctly from the start.
- Annual MSP worksheetHeadcounts, thresholds, controlled group analysis, multi-employer notes.
- MSP questionnairesResponse logs and carrier confirmations.
- Section 111 submission confirmationsAnd error reports (if applicable).
- ESRD coordination documentationStart/end dates and vendor notices.
Common traps
Treating retirees like actives: Retiree coverage isn't based on current employment; Medicare is usually primary.
Forgetting the disability 100+ threshold: Many employers only know the 20+ rule for working-aged.
Ignoring multi-employer aggregation: If any participating employer meets the threshold, the plan is primary for all unless specifically carved out.
Losing track of ESRD's 30-month CP: Especially when the employee's situation changes mid-period.
FAQs
What is MSP?
Rules that determine whether Medicare or the GHP pays first when someone is covered by both.
Why does MSP status matter?
Correct coordination avoids CMS recovery actions, penalties, and claim reprocessing by your carrier.
What happens if we get it wrong?
Medicare or carriers may recover improper payments; civil money penalties and administrative remediation may follow.
- CMS: Medicare Secondary Payer (MSP) Overview: Official CMS explanation of MSP rules and general applicability.
- CMS: Medicare Secondary Payer Fact Sheet (MLN006903, July 2025): Comprehensive CMS guide covering working-aged, disability, and ESRD rules in one document.
- CMS: Section 111 Mandatory Insurer Reporting (GHP): Guidance for Responsible Reporting Entities (RREs) on quarterly MSP reporting obligations.
- CMS MSP Manual Chapter 2: Detailed rules on employer size determinations and controlled group aggregation.
- CMS MSP Manual Chapter 3: Guidance on ESRD coordination periods and exceptions.
- Multi-employer plans: If any contributing employer meets the threshold (20+ for working-aged, 100+ for disability), the plan is primary for all participants unless a specific carve-out applies.
- Dual entitlement (e.g., age plus ESRD): ESRD rules control during the 30-month coordination period; after that, age/disability rules resume.
- Small employer exception: Employers with fewer than 20 employees are generally secondary to Medicare for working-aged enrollees. Coordinate with your carrier to make sure claims flow correctly.