Does the 20-employee rule count non-contractor employees who live and work outside the U.S.?
Answered by 8 licensed agents
CMS — the Centers for Medicare & Medicaid Services — specifically instructs employers to count employees worldwide when determining employer size for Medicare Secondary Payer rules. CMS even gives an example of a U.S. subsidiary with 12 employees and its Swedish parent company with 18,000 employees; for Medicare purposes, the employer count is 18,012.
Both full-time and part-time employees count. Independent contractors and self-employed individuals are not counted as employees for this test.
The employer generally meets the rule when it has 20 or more employees for each working day in at least 20 calendar weeks during the current or previous year. The 20 weeks do not have to be consecutive.
Why does this matter? If you are 65 or older and covered through current employment, an employer that meets the 20-employee test generally has its group health plan pay first, with Medicare paying second.
So if a company has only 10 or 15 U.S. employees but also has employees working overseas, do not assume it is a “small employer” for Medicare. The worldwide employee count needs to be checked.
Answered by Jeremy Harkins on September 22, 2026
Broker Licensed in TN, AR, CA & 5 other states
For Medicare’s 20-employee rule, CMS looks at bona fide employees on the employer’s employment rolls, including full-time and part-time employees. The rule does not automatically exclude employees just because they live and work outside the United States.
The key question is whether those workers are actual employees of the same employer, or of a related company that must be combined under applicable ownership rules.
Independent contractors generally would not count toward the 20-employee threshold.
This is especially important before delaying Part B. If the employer is actually considered to have fewer than 20 employees, Medicare may be primary once you’re eligible, and the employer plan may pay little or nothing if you failed to enroll in Part B. You could also face a late-enrollment penalty and a gap in coverage.
Before anyone delays Part B based on the 20-employee rule, I would get written confirmation from the employer or benefits administrator that the plan is primary to Medicare and that the employer meets the Medicare Secondary Payer employee-count requirement.
Answered by Jon Cavanaugh on October 5, 2026
Broker Licensed in NV
Answered by Sabri Amara on September 24, 2026
Broker Licensed in IN, AL, AZ & 28 other states
Answered by Shawn Lee on October 5, 2026
Broker Licensed in FL, CA, GA & MD, NV, PA & VA
Answered by Christopher Horan on October 5, 2026
Agent Licensed in PA, DE, FL & NJ, NY, TX & VA
Answered by Elenys Peraza on October 5, 2026
Agent Licensed in KY, AL, AR & 17 other states
Answered by Susan Ramirez on October 5, 2026
Agent Licensed in CA
Concerning this 20 year rule !!
Thanks
Answered by Andy ''Drew '' Russell on October 5, 2026
Broker Licensed in MO, AL, AR & 15 other states
Tags: Advice for Seniors Coverage The Medicare System
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