IRMAA - Medicare Premium adj - how get SS to look at current year?

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markmarz
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IRMAA - Medicare Premium adj - how get SS to look at current year?

Post by markmarz » Sat Apr 09, 2016 6:17 am

Hi Bogleheads,

In a couple months I'll be starting Medicare (age 65). Medicare looks back 2 years (2014) to determine whether there should be a premium adjustment. I retired March 2015 with income that year well below the $85,001 threshold, but I also did enough IRA->Roth conversions in 2015 to put my income well above the $107,001 threshold. In 2014 I was above the $107,001 threshold as well. Therefore SS has determined that I'm in the $107,001 bracket.

For 2016 and future years I plan on IRA->Roth conversions, plus other income, that will keep me below the $85,001 threshold. The driver for that isn't to avoid increased premiums, it's just working out that way.

I'm planning on appealing the IRMAA decision and wonder if I have a leg to stand on, or is it more likely that the determination will stick because they won't look at the current year? I've read that IRA->Roth conversions affect the IRMAA only 1 year at a time, so maybe I'll be in better shape next year. On the other hand, since there won't be a triggering event in 2016 or 2017 (such as retirement), maybe I can't appeal anyway.

Even if I can convince them to look at 2016 income by charms and hexes, I don't know how I can prove my income will be below $85,001 since my income is a very small pension but mainly withdrawals from taxable savings which of course haven't completed yet. How document the future?

Does anyone have any experience with appealing the IRMAA in similar circumstances? Any tips?

Thanks,
Mark M

JW-Retired
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Re: IRMAA - Medicare Premium adj - how get SS to look at current year?

Post by JW-Retired » Sat Apr 09, 2016 8:11 am

I doubt there is any appeal but it can't hurt to try. They will look at the current year in 2 years. At that time they will lower your premium.
JW
Last edited by JW-Retired on Sat Apr 09, 2016 8:14 am, edited 1 time in total.
Retired at Last

SGM
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Re: IRMAA - Medicare Premium adj - how get SS to look at current year?

Post by SGM » Sat Apr 09, 2016 8:12 am

I do not believe they will subtract out the conversions. However, they should subtract out your earned income if you have decreased or no earned income since you have retired since 2014. You will probably have to show them your 2015 1040 or a letter from your former employer stating you retired. I don't have direct experience but I have read the letters they send out each year regarding how to protest the extra premium. Good luck.

kaneohe
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Re: IRMAA - Medicare Premium adj - how get SS to look at current year?

Post by kaneohe » Sat Apr 09, 2016 8:29 am

My impression is that there are only a limited number of life changing events they consider valid:
seems like work stoppage should be valid since that's on the list.

From the appeal form:

STEP 1: Type of Life-Changing Event
Check ONE life-changing event and fill in the date that the event occurred (mm/dd/yyyy). If
you had more than one life-changing event, please call Social Security at 1-800-772-1213
(TTY 1-800-325-0778).
Marriage
Divorce/Annulment
Death of Your Spouse
Work Stoppage
Work Reduction
Loss of Income-Producing Property
Loss of Pension Income
Employer Settlement Payment

Nowizard
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Re: IRMAA - Medicare Premium adj - how get SS to look at current year?

Post by Nowizard » Sat Apr 09, 2016 9:06 am

If you are paying premiums based on income from two years ago and last year's tax return would have lowered premiums from two years ago, will the higher premiums paid for the current year be refunded along with the reduction? By the way, I filed the appropriate form with Medicare 45 days ago and have heard nothing at all.

Tim
Last edited by Nowizard on Sat Apr 09, 2016 9:19 am, edited 1 time in total.

markmarz
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Re: IRMAA - Medicare Premium adj - how get SS to look at current year?

Post by markmarz » Sat Apr 09, 2016 9:16 am

JW-Retired wrote:I doubt there is any appeal but it can't hurt to try. They will look at the current year in 2 years. At that time they will lower your premium.
JW
You're right, but in the meantime I'll be paying higher premiums in 2016 and 2017 for income earned in 2014 and 2015. Doesn't seem fair, somehow ;->

markmarz
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Re: IRMAA - Medicare Premium adj - how get SS to look at current year?

Post by markmarz » Sat Apr 09, 2016 9:20 am

kaneohe wrote:My impression is that there are only a limited number of life changing events they consider valid:
seems like work stoppage should be valid since that's on the list.

From the appeal form:

STEP 1: Type of Life-Changing Event
Check ONE life-changing event and fill in the date that the event occurred (mm/dd/yyyy). If
you had more than one life-changing event, please call Social Security at 1-800-772-1213
(TTY 1-800-325-0778).
Marriage
Divorce/Annulment
Death of Your Spouse
Work Stoppage
Work Reduction
Loss of Income-Producing Property
Loss of Pension Income
Employer Settlement Payment
Yes, but in my case it (work stoppage) happened in 2015, so, if they're looking at 2014 income for their determination, are they even interested in 2015 event? And in 2015 I passed the $107,001 threshold anyway. Which is why I think I'm likely screwed till 2018, when they finally start seeing income below the threshold (ie, 2016 and forward).

markmarz
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Re: IRMAA - Medicare Premium adj - how get SS to look at current year?

Post by markmarz » Sat Apr 09, 2016 9:21 am

SGM wrote:I do not believe they will subtract out the conversions. However, they should subtract out your earned income if you have decreased or no earned income since you have retired since 2014. You will probably have to show them your 2015 1040 or a letter from your former employer stating you retired. I don't have direct experience but I have read the letters they send out each year regarding how to protest the extra premium. Good luck.
Agreed, they won't subtract out the conversions ever. OTOH they're considered 'one-time' events each year. Don't think it matters in my case that they're one-time.

markmarz
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Re: IRMAA - Medicare Premium adj - how get SS to look at current year?

Post by markmarz » Sat Apr 09, 2016 9:22 am

Nowizard wrote:If you are paying premiums based on income from two years ago and last year's tax return would have lowered premiums from two years ago, will the higher premiums paid for the current year be refunded along with the reduction? By the way, I filed the appropriate form with Medicare 45 days ago and have heard nothing at all.

Tim
Don't know but doubt they'd issue a refund.

JW-Retired
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Re: IRMAA - Medicare Premium adj - how get SS to look at current year?

Post by JW-Retired » Sat Apr 09, 2016 10:11 am

markmarz wrote:
JW-Retired wrote:I doubt there is any appeal but it can't hurt to try. They will look at the current year in 2 years. At that time they will lower your premium.
JW
You're right, but in the meantime I'll be paying higher premiums in 2016 and 2017 for income earned in 2014 and 2015. Doesn't seem fair, somehow ;->
What would you do if your income had previously been low but will go up to above the threshold in 2016 and 2017. Would you petition for a higher premium in 2016/17? That would seem to be the fair thing. :P
JW
Retired at Last

markmarz
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Re: IRMAA - Medicare Premium adj - how get SS to look at current year?

Post by markmarz » Sat Apr 09, 2016 10:14 am

JW-Retired wrote:
markmarz wrote:
JW-Retired wrote:I doubt there is any appeal but it can't hurt to try. They will look at the current year in 2 years. At that time they will lower your premium.
JW
You're right, but in the meantime I'll be paying higher premiums in 2016 and 2017 for income earned in 2014 and 2015. Doesn't seem fair, somehow ;->
What would you do if your income had previously been low but will go up to above the threshold in 2016 and 2017. Would you petition for a higher premium in 2016/17? That would seem to be the fair thing. :P
JW
I wouldn't 'petition' for it, but it does seem more fair to calculate Medicare premiums based on the income in the year you're paying them. Of course that would mean the income would be estimated, but we have such models that work now for income tax. Definitely I'd have no objections to paying a higher premium in the years I have a higher income.

earlyout
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Re: IRMAA - Medicare Premium adj - how get SS to look at current year?

Post by earlyout » Sat Apr 09, 2016 10:28 am

Paying higher premiums based on estimated income would then require reconciliation each year and would add at least another hour and at least two pages to your tax return. No thanks. We will pay the same amount for Medicare whether it is current or whether it is billed two years later. It is an interest free loan after all.

Which raises another question -- If I die during the two years I"m waiting for the SSA to raise my Medicare premiums, who pays?

mbres60
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Re: IRMAA - Medicare Premium adj - how get SS to look at current year?

Post by mbres60 » Sat Apr 09, 2016 10:59 am

I retired in 2014 and had high income. I went on Medicare Part B in January 2015. They wanted me to pay the IRMAA because the last year's income(2014) was above the threshold. Because I had retired I just needed to fill out a form and say what I expected my 2015 income would be. I received a letter back from SS saying they lowered the amount. The key for you is that in 2015 you retired. By the time you go on Medicare this year you will be able to tell them you retired last year. That is one of the qualifying events. Make sure for 2016 you are under the limit.

FYI - I think the look back is just til your last tax return. They look at your MAGI. For me they looked back to 2014 (I got the letter in Dec 2015) so it was not a two year look back.
Last edited by mbres60 on Sat Apr 09, 2016 11:03 am, edited 1 time in total.

dpc
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Re: IRMAA - Medicare Premium adj - how get SS to look at current year?

Post by dpc » Sat Apr 09, 2016 10:59 am

I successfully appealed my IIRMA based on a "life-changing" event - sale of my business. But it was a hassle and I still haven't seen any adjustment from CMS. (the appear goes to Social Security, not Medicare). I had to go in person and provide them with the documentation of the business sale, along with an estimate of my 2015 income. Then the local SS office sent it up the line and eventually I did get a notice indicating they were going reduce my adjustment. If you don't have a qualifying life-changing event, I think you're out of luck.
"Worrying is like paying interest on a debt that you might never owe" -- Will Rogers

ralph124cf
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Re: IRMAA - Medicare Premium adj - how get SS to look at current year?

Post by ralph124cf » Sat Apr 09, 2016 12:03 pm

I turned 65 and retired in February 2014. I went in to the SS office to file, and immediately appealed my IIRMA status. This was granted immediately. A couple of months later when my wife turned 65 and applied, her appeal was turned down by a different person.

We went in again, and this time the appeal was granted.

We had to do so again in 2015, when they looked at the 2013 numbers.

Ralph

Goldfish
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Re: IRMAA - Medicare Premium adj - how get SS to look at current year?

Post by Goldfish » Sat Apr 09, 2016 12:53 pm

Looking for advice on how to avoid IRMMA if possible .
Husband turns 65 in NOV. of this year.
In 2014 MAGI was $205000.(married filing jointly)
in 2015 MAGI MAGI was $215000.
This year MAGI will be approx. $150000,working part time.
He is on my group health insurance this year, but I am looking to retire in early 2017.
Would he be able to apply for Medicare in Nov and immediately appeal IRMMA.
Should he apply in January of 2017 appeal?
Will we pay IRMMA for 3 years?
He will not be taking SS until 70.
Not sure how the group health insurance until the end of 2016, beginning of 2017 effects this.
Thanks in advance for all replies.

markmarz
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Joined: Sun Sep 21, 2014 4:20 am

Re: IRMAA - Medicare Premium adj - how get SS to look at current year?

Post by markmarz » Sat Apr 09, 2016 1:34 pm

earlyout wrote:Paying higher premiums based on estimated income would then require reconciliation each year and would add at least another hour and at least two pages to your tax return. No thanks. We will pay the same amount for Medicare whether it is current or whether it is billed two years later. It is an interest free loan after all.

Which raises another question -- If I die during the two years I"m waiting for the SSA to raise my Medicare premiums, who pays?
Huh? How will you ever make up for the 1st 2 years, where you're being charged higher premiums based on income you no longer have?

Also I'm not suggesting this is part of the tax return - though it could be. Saying that there are ways to handle this, such as how estimated taxes are handled.

markmarz
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Re: IRMAA - Medicare Premium adj - how get SS to look at current year?

Post by markmarz » Sat Apr 09, 2016 1:37 pm

mbres60 wrote:I retired in 2014 and had high income. I went on Medicare Part B in January 2015. They wanted me to pay the IRMAA because the last year's income(2014) was above the threshold. Because I had retired I just needed to fill out a form and say what I expected my 2015 income would be. I received a letter back from SS saying they lowered the amount. The key for you is that in 2015 you retired. By the time you go on Medicare this year you will be able to tell them you retired last year. That is one of the qualifying events. Make sure for 2016 you are under the limit.

FYI - I think the look back is just til your last tax return. They look at your MAGI. For me they looked back to 2014 (I got the letter in Dec 2015) so it was not a two year look back.
That's encouraging! So they don't require documentation, just your statement that your expected income will be below the limit. I was worried about how to document something that hasn't happened, so this helps a lot. It also helps that they don't necessarily stick to the 2 year rule.

markmarz
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Re: IRMAA - Medicare Premium adj - how get SS to look at current year?

Post by markmarz » Sat Apr 09, 2016 1:39 pm

ralph124cf wrote:I turned 65 and retired in February 2014. I went in to the SS office to file, and immediately appealed my IIRMA status. This was granted immediately. A couple of months later when my wife turned 65 and applied, her appeal was turned down by a different person.

We went in again, and this time the appeal was granted.

We had to do so again in 2015, when they looked at the 2013 numbers.

Ralph
Yes, I've read other stories about incorrect information on the part of the SS office. Glad it worked out for you.

markmarz
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Re: IRMAA - Medicare Premium adj - how get SS to look at current year?

Post by markmarz » Sat Apr 09, 2016 1:43 pm

Goldfish wrote:Looking for advice on how to avoid IRMMA if possible .
Husband turns 65 in NOV. of this year.
In 2014 MAGI was $205000.(married filing jointly)
in 2015 MAGI MAGI was $215000.
This year MAGI will be approx. $150000,working part time.
He is on my group health insurance this year, but I am looking to retire in early 2017.
Would he be able to apply for Medicare in Nov and immediately appeal IRMMA.
Should he apply in January of 2017 appeal?
Will we pay IRMMA for 3 years?
He will not be taking SS until 70.
Not sure how the group health insurance until the end of 2016, beginning of 2017 effects this.
Thanks in advance for all replies.
I don't see how you can avoid ANY IRMMA adjustment, since the threshold begins at $85,001. As far as group health, I can tell you that it was a requirement where I worked (Blue Cross) that Medicare is listed as the primary insurer once you turn 65, whether you like it or not. Meaning you're on Medicare at 65 and whatever IRMAA comes in, comes in. Perhaps it's different with different employers or insurers, but I'd be surprised if it were.

engineerartist
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Re: IRMAA - Medicare Premium adj - how get SS to look at current year?

Post by engineerartist » Sat Apr 09, 2016 2:29 pm

I had the same problem when I retired in 2014. Social Security "looked back" at 2012 (I had exercised stock options to avoid losing them).

After some research, I found and filed (in person) form SSA-44 "Medicare Income-Related Monthly Adjustment Amount - Life Changing Event" checking the "Work Stoppage" box and filled in my estimated MAGI for 2014 and 2015, both of which were significantly lower than 2012 (and 2013).

After the expected bureaucratic delay, my IRMAA was rescinded.

BTW, although the Individual MAGI limit is $85,000, the MFJ limit is $170,000 - and a reminder that MAGI is AGI + any tax-exempt bond interest.
Retired - dividend growth investor

markmarz
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Re: IRMAA - Medicare Premium adj - how get SS to look at current year?

Post by markmarz » Sat Apr 09, 2016 4:08 pm

engineerartist wrote:I had the same problem when I retired in 2014. Social Security "looked back" at 2012 (I had exercised stock options to avoid losing them).

After some research, I found and filed (in person) form SSA-44 "Medicare Income-Related Monthly Adjustment Amount - Life Changing Event" checking the "Work Stoppage" box and filled in my estimated MAGI for 2014 and 2015, both of which were significantly lower than 2012 (and 2013).

After the expected bureaucratic delay, my IRMAA was rescinded.

BTW, although the Individual MAGI limit is $85,000, the MFJ limit is $170,000 - and a reminder that MAGI is AGI + any tax-exempt bond interest.
Thanks, that's encouraging as well. I had called SS and was told I'd need to appeal with form SSA-561-U2 'Request for Reconsideration', which they mailed to me. There's nothing on that form to check, so I guess I wasn't given complete information.

I've scheduled an appointment with my local SS office for May, I'll ask about SSA-44 and everything else before I submit an appeal. Your experience and others indicates it's possible to get SS to look at the current year and accept estimates as well. Not what I expected!

mbres60
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Re: IRMAA - Medicare Premium adj - how get SS to look at current year?

Post by mbres60 » Sat Apr 09, 2016 4:31 pm

I filed SSA-44. No documentation needed. I checked off work stoppage. It asked for estimated MAGI for 2015 (remember I was filing in December to start Part B in January). I just needed to hand it to the person at the desk. She went back inside and came back and told me ok. Then I waited for my approval letter in the mail. It did not take very long.

markmarz
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Re: IRMAA - Medicare Premium adj - how get SS to look at current year?

Post by markmarz » Sat Apr 09, 2016 5:53 pm

mbres60 wrote:I filed SSA-44. No documentation needed. I checked off work stoppage. It asked for estimated MAGI for 2015 (remember I was filing in December to start Part B in January). I just needed to hand it to the person at the desk. She went back inside and came back and told me ok. Then I waited for my approval letter in the mail. It did not take very long.
Cool, thanks.

SpideyIndexer
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Re: IRMAA - Medicare Premium adj - how get SS to look at current year?

Post by SpideyIndexer » Thu Jul 12, 2018 4:22 pm

If one's current year income is higher than the SSA-44 estimate, I suppose SSA will get later get the tax return data from the IRS and the IRMAA based on the income estimate will be later corrected? I imagine this must happen fairly often. Is there any problem with this scenario? I may not yet have my Roth conversion amount finalized.

neilpilot
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Re: IRMAA - Medicare Premium adj - how get SS to look at current year?

Post by neilpilot » Thu Jul 12, 2018 7:31 pm

When I filed my successful IRMAA appeal in Nov17 I included my MAGI estimates for TY2017 and TY2018. The SSA asked me to send them a copy of my TY2017 return when I submitted it earlier this year. I have no idea if they will ask me for TY2018 return early next year.

SpideyIndexer
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Re: IRMAA - Medicare Premium adj - how get SS to look at current year?

Post by SpideyIndexer » Fri Jul 13, 2018 1:09 pm

Here are more specifics. Hours were (and income) reduced in 2017 and reduced further 2018. I am one tier lower in 2017 and two tiers lower in 2018 if don't do a huge Roth conversion this year. If I submit low estimated MAGI for this year and instead it becomes much higher than the estimate what will is likely to be the ultimate results:

1. IRMAA will initially be adjusted per the 2018 estimate, then readjusted per the 2017 MAGI.
2. IRMAA will initially be adjusted per the 2018 estimate, then readjusted per the 2018 actual MAGI.
3. IRMAA will initially be adjusted per the 2018 estimate, then readjusted per the 2016 MAGI (default.)

SpideyIndexer
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Re: IRMAA - Medicare Premium adj - how get SS to look at current year?

Post by SpideyIndexer » Sat Jul 14, 2018 10:59 am

Spoke to the SSA on the phone and their answer was #1, which is the best case for a taxpayer. The rep also stated that there is no issue or penalty due to having actual current year income turning out to be much higher than one's SSA-44 estimate.

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