irmaa: Is it tax adjusted, or what?

May 24, 2019

  1. keith365
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    I knew this question would be asked by a prospect. Is Irmaa based on total tax from the previous 2 years, after taxes, tax adjusted, total tax, total modified adjusted, what?
    And, my client was told that when he signs up for medicare, 7 months after being separated from employment, he can "suspend" the start date of Medicare another 3 months. Does that sound right, or even possible? Thanks!
     
    keith365, May 24, 2019
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  2. Travis Price
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    It’s based off of MAGI

    https://www.healthmarkets.com/resources/medicare/what-is-irmaa/

    I couldn’t find anything that states you can delay AFTER you sign up for Part B. SEP ends 8 months after you or your spouse leaves a work based plan. Unless he wants to wait for the next general enrollment.

    Someone else can correct me if I’m wrong.
     
    Last edited: May 24, 2019
  3. steveadlman
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    Modified Adjusted Gross Income
     
  4. WCMason
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    IRMAA is is assessed based on MAGI, which is AGI (line 37) and tax-exempt interest income (line 8b). They use the federal tax return from the year before last because last year’s tax returns aren’t all filed yet. So, its based on 2017 this year, 2018 next year, etc.

    I’ve never had a client apply in the eighth month of their Part B SEP and want to push out the effective date two months beyond that so can’t say if that would work. Usually clients who want to delay Part B as long as possible after retirement are those who have COBRA—sometimes paid for by the employer—and mistakenly think they can keep that as their primary insurance. Once I explain to them that doing that causes them to have no primary insurance for that eight months they abandon their plan to delay and sign up for Part B to start the day they leave active employer coverage.
     
    WCMason, May 25, 2019
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  5. LostDollar
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    No.

    https://www.cms.gov/Medicare/CMS-Forms/CMS-Forms/Downloads/CMS40B-E.pdf

    Per instructions for the form, you can choose an alternate start date only if you apply for Part B while still employed or during the first full month you do not have employer coverage. But, if one waits until month 7 of the SEP to apply, the only option available is the first of the month after the application is made. (At least according to the instructions for the form.)
     
    Last edited: May 25, 2019
  6. keith365
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    Thanks for all of the responses. My prospect cut and pasted language right out of his Verizon benefits booklet, which said that he would have 7 months following the last day of the month that he was employed (I guess this would be the 8 months that we are all trained on for an sep of this type, but not sure), and that he CAN request a future part B effective date up to 3 months into the future.
     
    keith365, Jun 11, 2019
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  7. Travis Price
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    I would call Medicare and verify that, personally. Something about that doesn't sound right.

    The problem is, while he's telling you that... If he's wrong, and incurs a penalty, he'll totally throw you under the bus.

    Trust, but verify.
     
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