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Who is IRMAA and why is she taking my money?

For most of us, we don’t have to worry about IRMAA and if she’ll come knocking on our door, but for some, it can be a shocking and unexpected visit.

IRMAA stands for Income Related Monthly Adjustment Amount and applies to Medicare beneficiaries who have higher incomes. This adjustment can affect your Part B and Part D premium costs.

The main parts of Original Medicare are Part A and Part B, (visit Understanding Medicare Benefits - The Parts of Medicare). Part A coverage is hospital insurance. Most people receive Part A premium free because they have paid for it through payroll tax withdrawals as working individuals. Part B coverage is medical coverage and has a monthly premium. Part D is drug coverage and has a premium. IRMAA can affect your Part B and Part D premium costs.

How much will my IRMAA be?

In 2022, the standard monthly premium for Part B is $170.10. Depending on your yearly income, you may have an additional IRMAA surcharge.

This amount is calculated using your income tax information from two years ago. So, for 2022, your tax information from 2020 will be assessed.

The table below can give you an idea of what costs to expect in 2022.

There’s no standard monthly premium for Part D plans. The company offering the policy will determine its monthly premium.

The surcharge for Part D is also determined based on your income tax information from two years ago. As with Part B, things like your income bracket and how you’ve filed your taxes impact the surcharge amount.

What can I do if I don’t think I should pay an IRMAA?

If you don’t believe you should owe an IRMAA, you can appeal the decision on an SSA-44 form.

When can I appeal?

You can appeal an IRMAA decision within 60 days of receiving an IRMAA determination notice in the mail using the SSA-44 form. Outside of this time frame, the SSA will evaluate whether you have good cause for a late appeal.

In what situations can I appeal?

There are two situations when you can appeal an IRMAA.

The first situation involves the tax information used to determine the IRMAA. Some examples include:

· The data used by the SSA to determine the IRMAA is incorrect.

· The SSA used older or out-of-date data to determine the IRMAA.

· You filed an amended tax return during the year the SSA is using to determine the IRMAA.

The second situation involves life changing events that significantly impact your income. There are seven qualifying events:

· marriage

· divorce or marriage annulment

· death of a spouse

· reduction in work

· cessation of work

· loss or reduction of specific types of pensions

· loss of income from an income-generating property

This is likely to be the case when someone retires and their income goes down significantly. This can also happen if two years before you file for Medicare you sold an asset, such as a business interest or commercial property which obviously affects your tax return.

What documentation will I need to provide?

The documents you need to provide as a part of your appeal, in addition to the SSA-44 form, depend on your situation. They might include:

· federal income tax returns

· marriage certificate

· decree of divorce or marriage annulment

· death certificate

· copies of pay stubs

· signed statement from your employer indicating reduction or stoppage of work

· letter or statement indicating a loss or reduction of a pension

· statement from an insurance adjuster indicating loss of an income-generating property

How do I submit an appeal?

You can contact the SSA to begin the appeals process. Your initial determination notice should also have information for how to do this. If the SSA reviews and approves your appeal, your monthly premiums will be corrected. If your appeal is denied, the SSA can provide you with instructions on how to appeal the denial in a hearing.

Go to the SSA website or contact your local Social Security Administration office with questions. As always, this is not intended to be tax advice. Please consult your CPA or Tax professional for your specific situation.

As always, it begins with a conversation! I am here to guide you and answer your questions.

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