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Dear Matt,

I got your book and started reading it. Early on, you explain IRMAA which is good, but you fail to explain that high income retirees (with high income two years before retirement) should file form SSA-44 to claim correct income for the first two years after retirement.

My income drops below the IRMAA income limits as soon as I retire. Your book implies you have to live with the higher income claim from two years earlier, which could be a several thousand-dollar error.

Maybe a blog post on that would be good? Is my research on SSA-44 wrong?

Thanks. Good help.

Paul V.


Paul,

Thanks for the IRMAA appeals question. I get a ton of IRMAA questions, and for good reason. It’s confusing and potentially very expensive if you’re impacted.  Not only that, it’s a bit murky, as there’s not a lot of deep information online about it, when the IRMAA notification letters arrive, how to go about planning for it and even calculating it!  Anytime there’s money involved in a calculation with three(!) government agencies involved, people get nervous.  Medicare, Social Security and the IRS.  Makes me shudder to even type that.

However, I believe given your short example, you DO have to live with the higher income claim from two years prior, unless a) you appeal it or b) you have a “Life Changing Event.” Keep reading for why.

IRMAA Summarized

In a nutshell, the Social Security Administration charges people higher premiums for Medicare Part B and Medicare Part D if they make over (rounding) $91k per year filing single, and $182k filing jointly. In order to determine whether or not you’re impacted, Social Security looks at your taxes from two years ago, then sends you a notice if they (using the IRS information) determine you’re over the threshold. Social Security uses federal income tax return information from the Internal Revenue Service (IRS) about your modified adjusted gross income (MAGI) to make Income- Related Monthly Adjustment Amount (IRMAA) determinations.  If you don’t appeal their decision, Social Security starts deducting more money out of your Social Security checks for your Medicare Part B and Medicare Part D premiums.

In my book, here’s what I say about appealing the IRMAA determination:

If you disagree with the way the Social Security Administration has processed your tax information or simply think it’s wrong, file an appeal. You can save hundreds of dollars a year if they favorably redetermine your income. In other words, if you think you’re being charged too much, you can appeal it. As you can imagine, in true bureaucratic fashion, there’s a form to fill out. You can request an appeal in writing by completing a Request for Reconsideration (Form SSA-561-U2), or you may contact your local Social Security office to file your appeal. You can find the appeal form online at https://www.ssa.gov/forms/ssa-561.pdf. Alternatively, head over to PrepareforMedicare.com/links for the form.

IRMAA Appeals

Paul, kudos to you for finding another Social Security form, and you raise a great question. Which one do you use? SSA-561-U2 or SSA-44?

I took a lap around the internet and my contacts and frankly didn’t come up with much.

So, I emailed the Social Security Administration! Here’s a portion of what they emailed me back with (and I’ll interpret it below each paragraph, and I’ve bolded important lines):

SSA requests MAGI information from IRS for the tax year that is two years prior to the premium year, for certain Medicare beneficiaries. If IRS does not have data for that tax year, it will send us data for the tax year that is three years prior to the premium year if it is available and above the threshold. When SSA uses data from three years prior, we will make a correction when data from two years prior becomes available. If data from two years prior and three years prior is not available for an individual or MAGI is at or below the threshold, IRMAA will not be imposed.

Interesting- I didn’t know that part about three years prior, and then they’d make a correction! See? Even I learn something new every day! This is important news, however because it explains the last paragraph. But first, look at this:

When SSA receives MAGI information from IRS, we will use the appropriate Sliding Scale table to determine the IRMAA. Beneficiaries will receive notification with information about SSA’s determination and their appeal rights.

Yep, this coincides with what I know and what’s in my book. OK, last paragraph:

There will be cases when a beneficiary or the spouse of a beneficiary will have experienced one or more events causing a significant reduction in modified adjusted gross income (MAGI). A “significant” reduction in MAGI is a reduction that decreases or eliminates the Income-Related Monthly Adjustment Amount (IRMAA) for a specific year. A beneficiary who has experienced a life-changing event that caused a significant reduction in MAGI may request SSA to make a new initial determination using a more recent tax year than the tax year used previously.

Wait, THAT is new information. Look at that last line again.

A beneficiary who has experienced a life-changing event that caused a significant reduction in MAGI may request SSA to make a new initial determination using a more recent tax year than the tax year used previously.

So, what this means to me is:

  1. What I have in my book is correct, and I’ve underlined the distinctions between the two.

If you disagree with the way the Social Security Administration has processed your tax information or simply think it’s wrong, file an appeal. You can save hundreds of dollars a year if they favorably redetermine your income. In other words, if you think you’re being charged too much, you can appeal it. As you can imagine, in true bureaucratic fashion, there’s a form to fill out. You can request an appeal in writing by completing a Request for Reconsideration (Form SSA-561-U2), or you may contact your local Social Security office to file your appeal.

  1. However, if you have a “Life Changing Event” AND you have a more recent tax return showing you are BELOW the IRMAA levels, you’d use a different form. This is where the note in their email about looking back three years instead of two comes into play, and that situation form SSA-44.

Although I covered these in a prior post, here’s the rest of their email back to me, which covers what qualifies as a “Life Changing Event.”

A life changing event can be one or more of the following eight events:

  • Death of Spouse
  • Marriage
  • Divorce or annulment
  • Work reduction
  • Work stoppage
  • Loss of Income Producing Property
  • Loss or reduction of pension income
  • Receipt of employer settlement payment.

To report a Life Changing Event (LCE) please use the form in the link below:

Medicare Income-Related Monthly Adjustment Amount – Life-Changing Event,(Form SSA-44)

So Paul, it appears as if there are two very specific forms for different uses.  One is for an appeal, and the other is for an IRMAA re-determination. Both require some sort of evidence to turn in alongside either the appeal or the re-determination.

I sincerely appreciate the question, because I learned something, too.  I’m also going to slightly amend and update that section in my book for the 2022-2023 version, which will be released on September 1, 2022.

Social Security Offices Are Slowly Re-opening

Paul, I hope that helps! My advice? Make an appointment with someone from your local Social Security office and bring along all of the required documentation for both forms.

Many, many Social Security offices remain closed or very limited in their hours and staffing.  I actually called my local office and the phone lines were scratchy and the voices unintelligible the first two times I called.  On the third attempt, I got some automated messages and then got hung up on. This isn’t news – it’s been going on for a long time and I’ve heard from others their phone systems are not working well, or at all.

That’s why I simply emailed them.

However, I recently got an email from the Social Security Administration outlining when they’re going to start opening up more in-person appointments.  They made the announcement on their blog, which you can find by clicking here.   I guess we’ll see how long it’ll take for someone to actually get an in-person appointment.

Paul, if you do – write me back and let me know how it went!

I love answering Medicare questions. Send me yours by clicking here and I’ll pick a few for a future blog post!

To your wealth, wisdom, and wellness!

-Matt Feret

 

Related Articles:

IRMAA Thresholds and What Counts Towards IRMAA

What Is the 2022 Medicare Part B Premium and What Are the 2022 IRMAA Brackets?

Author Bio: Matt Feret is the author of the Prepare for Medicare book series and launched prepareformedicare.com to help people get objective answers to questions about Medicare. He’s also the host of The Matt Feret Show.

He’s held leadership roles at numerous Fortune 500 Medicare health insurers in sales, marketing, operations, product development and strategy for over 20 years.  Matt holds a BA from Virginia Tech and an MHA from Washington University in St. Louis.

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