The income-related monthly adjustment amount, or IRMAA, is a surcharge that high-income earners may pay in addition to their Medicare Part B and Part D premiums. Individuals interested in appealing their IRMAA must submit the appeal via a form and the overall process can seem daunting, but we have helped many clients through it with a few helpful tips to keep in mind.
First, it’s important to know that appeals cannot be filed preemptively, they can only be submitted after a person receives their Social Security Administration (SSA) statement that they are being access IRMAA.
Completing the Appeal Form
A question we often receive is, “How do we fill out form SSA-44?” Below are a few pieces of context for each section that can guide you.
- Step 1: Type of Life-Changing Event
- You can only choose one and that is often retirement, called “Work Stoppage” on the form. This will be your date of retirement.
- Step 2: Reduction in Income
- What they are seeking is the first tax year income will be reduced the following year. If client retires 12/31/2021 the year to fill in is 2022.
- Step 3: Modified Adjusted Gross Income
- Remember, SSA uses MAGI, which is why they ask for AGI and Tax Exempt. This is only needed if income in 2023 will be lower than 2022.
- Step 4: Documentation
- Evidence of Life Changing Event: This is usually a statement on employer letterhead.
- Signed copy of first two pages of latest federal tax return.
- Estimates of 2022 and 2023 MAGI – here I try to use Holistiplan reports.
Once you complete the form and compile all information, it needs to be taken or mailed to your local SSA office. You can find your local SSA office here.
If your appeal is approved, Part B withholding will be adjusted going forward accordingly and previous IRMAA costs will be credited in that tax year. If your appeal is rejected, you can appeal this rejection with additional supporting documentation.
IRMAA is Recalculated on a Calendar Year Basis
Following the receipt of your annual tax return, the Social Security Administration will review your income to confirm if it was below the IRMAA limit. If it exceeded the limit, the difference will be calculated and you will receive a letter notifying you what you owe.
For example, if an appeal was approved for 2022, the IRMAA calculated was based on your 2020 tax return. After filing your 2021 return in April 2022, in December 2022, you may receive a letter that a revised IRMAA will be assessed in 2023 based on your 2021 return and if appropriate you will need to do a new appeal for 2023. Confusing, but the takeaway is that for any year IRMAA is assessed a new appeal needs to be filed.
When to Appeal?
You can only appeal after you have received notification that you are being assessed IRMAA. Do so if you believe in that year you will be under the current income limits. The unknown often happens near the end of year with additional income, capital gains, and so forth. Being prepared to fill out the form and provide proper documentation will put you in the best position for your appeal.