How to correct Medicare MAGI assumption

[RetireBy90]

I recently signed DW up for Medicare and found they used 2016 taxes MAGI to figure her Income Related Monthly Adjustment Amount (IRMAA) in Medicare speak. Now in 2016 my mega corp was the target of a strike for about 3 months, and I had to work strike duty of 12 hour days 6 or 7 days a week. They counted travel time so worked out to 14 hours * 6 days or 84 hours and 44 of that was overtime, so paid for 106 hours each week. Only important because that jacked our MAGi into the next level for Medicare part B and it was a temporary jack of income. 2017 MAGI has us back just below the cutoff. The letter they sent out says you can only appeal this for a few reasons, one of which is you reduced your work hours. Well, seems to fit for me so I filed a SSA 44 to appeal.

Does anyone have experience of this sort ? I filed the appeal about a month ago and have received 2 letters from them since then. I'm not sure why they sent the letters and they are not clear at all if they apply to the appeal or are just what they send out to new Medicare folks. I'm not sure if they have replied to the appeal or not.

Just wondering if anyone has gone through this before. Thanks in advance

 

[youbet]

I believe they will deny your appeal and tell you that while your high income was apparently temporary, your higher level of MAGI and the resulting IRMAA is also temporary. This is based on the experience of a family member.

Think of a commissioned salesperson whose income varies widely from year to year. Would they base his MAGI only on the preceding or subsequent low year ignoring the relevant high year? Probably not. He'd pay more IRMAA for the high years and less or no IRMAA for the low years. Or an employee who works a ton of OT one year and little the next (for whatever reason).

But it's confusing and I think there is wiggle room. You might want to make an appointment at your local SS office and see what a friendly SS representative there says about it.

I think it's key that you be able to show that there is no scenario where your income may rise again. No more strike coverage. No special projects requiring lots of OT, etc. Perhaps your employer could provide you with a letter saying that company policy is to no longer pay OT and your base salary will be your total compensation, period, no matter what.

Let us know how this goes please. I'm pulling for ya but I'm not optimistic that you're going to win.

 

[RetireBy90]

I believe they will deny your appeal and tell you that while your high income was apparently temporary, your higher level of MAGI and the resulting IRMAA is also temporary. This is based on the experience of a family member.

Think of a commissioned salesperson whose income varies widely from year to year. Would they base his MAGI only on the preceding or subsequent low year ignoring the relevant high year? Probably not. He'd pay more IRMAA for the high years and less or no IRMAA for the low years. Or an employee who works a ton of OT one year and little the next (for whatever reason).

But it's confusing and I think there is wiggle room. You might want to make an appointment at your local SS office and see what a friendly SS representative there says about it.

I think it's key that you be able to show that there is no scenario where your income may rise again. No more strike coverage. No special projects requiring lots of OT, etc. Perhaps your employer could provide you with a letter saying that company policy is to no longer pay OT and your base salary will be your total compensation, period, no matter what.

Let us know how this goes please. I'm pulling for ya but I'm not optimistic that you're going to win.

Well, hate to be a downer, but that is my take. I'm kind of wondering if I should just write it off as a done deal of if I should be aggressive in pursuing it. It is couple hundred dollars so I will pursue but didn't think it was worth spending lots of time.

Thanks for the feedback.

 

[RetireBy90]

Just wanted to post a follow up after I received the response from SSA. Turns out they said that after reviewing my appeal, there would be no IRMAA. Strange conclusion and I had already paid first quarter premium so I’ll have to hit them again to get the extra premium back. BTW, according to the scale on the web site and the letter they sent, IRMAA should be $35 each month, so a call to recover $300 might end up with the agent figuring this out and set it to $35 it should be. Still, get $200 back, works for me.

 

[gauss]

You may have done this already as part of your appeal, or it may not be appropriate for your case, but have you checked out SSA From 44 (Medicare Income-Related Monthly Adjustment Amount - Life-Changing Event) yet?

Here is a blog article discussing use of the form.

This amount, set in 2007, has been subject to cost of living increases every year. The intent of the rule was to make the top 5 percent of all income-earners on Medicare contribute a greater share to the public pool. However, because Social Security generally receives income information by the IRS from 2 years past, many people get trapped into having to pay the IRMAA at a time when their income has taken a noticeable drop. These are not the people the IRMAA is intended to be paid by.

The key to getting the IRMAA removed is declaring a life-changing event. At the time of this writing, Social Security lists eight possible things that could happen which would qualify to eliminate or reduce the IRMAA, and all your client needs to do is qualify for one of them. Almost every client we have ever helped with this situation can attest either to “work reduction” or “work stoppage.” However, there has also been a “death of a spouse” and “loss of pension income” to qualify them.

-gauss

 

[RetireBy90]

I used the SSA 44 when I did the appeal, claimed since I did strike work in 2016, which caused many extra hours that when I returned to normal after strike that my hours changed. Wanted to post a follow up to encourage anyone who has a case to do the appeal. Worked for me!!!

 

[gauss]

Cool! Thanks for the feedback. Glad to hear that you successfully got it corrected.

-gauss