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Medicare, Government Pension Offset and Divorce
Old 03-16-2015, 12:56 PM   #1
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Medicare, Government Pension Offset and Divorce

I'm a retired local government employee receiving a pension. Because I was hired before 1986 there were never any contributions made to Social Security from my salary or by my employer. I do have 21 credits from other employment which makes me the rare person who will not be eligible to get into Medicare without paying for it when I turn 65. The health insurance costs for that will be outrageous.

I researched this several years ago and was sure that I could get into Medicare based on my spouse's contribution history. She has enough credits from past employment.

But now divorce looms, and I thought I would still be eligible to apply for Medicare as an ex-spouse using her eligibility. The CFP at my pension system originally said otherwise, claiming that WEP (I think he meant GPO) would prevent me from claiming as a divorced spouse. He later sent me an email saying that he was mistaken and provided this link.

http://treasury.tn.gov/oasi/PDFs/MED...NFORMATION.pdf

Once again I find myself in the 1% of the population who has a weird financial / tax / retirement situation. I hate that, because finding the right answer can be nearly impossible.

Anybody have any experience or information about this?
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Old 03-16-2015, 01:33 PM   #2
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This factsheet from the SS Administration clearly states that GPO does not affect eligibility for Medicare.http://www.ssa.gov/pubs/EN-05-10007.pdf

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Even if you do not receive cash benefits based on your spouse’s work, you still can get Medicare at age 65 on your spouse’s record if you are not eligible for it on your own record
This SSA webpage shows the criteria for SS eligibility for divorced spouses Retirement Planner: Benefits For Your Divorced Spouse

It would appear that if your marriage was > 10 years and you have not remarried, you will be eligible for Medicare. As I read it, GPO does not affect eligibility, it affects the amount paid.
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Old 03-16-2015, 02:11 PM   #3
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Double check your Medicare credits. Even if a state or local government opts out of SS they usually pay the Medicare tax bit of FICA........in fact, I think that might be a mandate.
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Old 03-17-2015, 07:05 AM   #4
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I would check carefully. From what I have read states had the ability to provide coverage for employees hired before 1986 and most did. If your's didn't that is a travesty. But typical HR clerks might not have correct information. The state would provide the coverage thru a Section 218 agreement.
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Old 03-17-2015, 07:10 AM   #5
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Originally Posted by nun View Post
Double check your Medicare credits. Even if a state or local government opts out of SS they usually pay the Medicare tax bit of FICA........in fact, I think that might be a mandate.
Only mandated for new hires starting April 1, 1986 or later, and I started in August of 1979. In fact, according to one source, it is illegal for those people to contribute.

Quote:
Thus, new Cook County employees are automatically enrolled in the payroll deduction program and are covered by Medicare at age sixty-five. Learning this, I called the Social Security Administration and the county benefits manager to find out how my wife and I could sign up for payroll contributions and Medicare coverage. I found out that it is illegal for public employees who began work before 1986 to contribute and participate in the regular Medicare payroll deduction program.
Weird loophole. I remember discussions when WEP became law in the early 80's about the need to work outside jobs to qualify for SS. Nobody talked about Medicare, or I didn't pay attention because I was 24 and healthcare was so cheap then anyway.

At least I'm not the only one.

Quote:
As we learned, even Medicare...isn’t truly universal. And although Medicare’s public employee loophole has now been plugged for new workers, other gaping holes exist throughout the system... and the small number of us who are not covered by Medicare when we turn sixty-five.
Source for quotes: http://content.healthaffairs.org/content/21/6/202.full
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Old 03-17-2015, 08:50 AM   #6
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Quote:
Originally Posted by Leonidas View Post
Only mandated for new hires starting April 1, 1986 or later, and I started in August of 1979. In fact, according to one source, it is illegal for those people to contribute.

Weird loophole. I remember discussions when WEP became law in the early 80's about the need to work outside jobs to qualify for SS. Nobody talked about Medicare, or I didn't pay attention because I was 24 and healthcare was so cheap then anyway.

At least I'm not the only one.

Source for quotes: http://content.healthaffairs.org/content/21/6/202.full

Retirees have the right to stay on insurance policy in retirement at my place of employment. My boss was commenting 5-6 years ago on needing to cut insurance costs and said he needed to contact these old retirees still paying premiums when they should be on Medicare already and saving money. I had to explain to him they were not eligible for Medicare that is why they are on the plan. He had know idea, he just thought they were wasting money.


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Old 03-17-2015, 09:49 AM   #7
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We have insurance rights in retirement also, but the city self-funds and they expect everyone to apply for Medicare at 65. For those that don't or can't, the premiums are dramatically increased.




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Old 03-19-2015, 06:03 PM   #8
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Sorry about the possible divorce Leonidas. Middle age is a bad time for this, but quite frequent.

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Old 03-19-2015, 10:29 PM   #9
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Thanks for the kind thought. The actual process is a pain, but the divorce is a good move for me.
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Old 03-19-2015, 11:32 PM   #10
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If I understand this correctly, if you had 40 SS credits, then you would get medicare.
Could you pick up an outside job, to earn $4,000 per year ?
That would earn the SS credits needed which is only 19 more.
That would 5 years of doing some part-time work.

It could even been self employment, like painting or other summer work as you can earn the 4K all at once for the year, it used to be 1 credit / quarter, but now is just a yearly amount.
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