Fong Law Group

Seniors Affected by the Coronavirus Pandemic Have More Time to Apply for Medicare or Change Plans

The closure of Social Security offices has caused problems and worries for recently unemployed seniors who need to apply for Medicare after losing their employer coverage. In response, the federal government has announced that seniors affected by the crisis have additional time to enroll in Medicare or change plans.

With millions of people out of work and losing their employer health insurance due to the coronavirus pandemic, the need for Medicare coverage is critical. While it is possible for some seniors to apply for Medicare online, others need to provide more information, including individuals who did not sign up for Medicare Part B initially because they had health insurance through an employer. Seniors who are applying for Medicare Part B after losing their job need to provide proof of their employer policy along with their Medicare application to ensure they aren’t subject to substantial penalties. With Social Security offices closed, Medicare applicants may have difficulty figuring out how to submit the necessary information or getting answers to their questions about their application. 

The Centers for Medicare and Medicaid Services (CMS) has announced changes to Medicare enrollment periods to help seniors affected by the coronavirus pandemic. Those who missed their opportunity to enroll in Medicare will have additional time to apply. CMS is providing “equitable relief” to seniors who:

• were in their Initial Enrollment Period (IEP), General Enrollment Period (GEP), or Special Enrollment Period (SEP) between March 17, 2020, and June 17, 2020; and
• did not submit an enrollment request to the Social Security Administration (SSA).

Seniors have until June 17, 2020, to submit an application. Applications can be submitted via fax to 1-833-914-2016 or mailed to the local SSA field office. Although SSA offices are closed for in-person service, offices are still processing applications received by mail. For the SSA’s Social Security Office Locator, go here: https://secure.ssa.gov/ICON/main.jsp. 

For questions and answers on how to submit a Medicare application and what information is needed, click here.

In addition, CMS has announced an SEP for people to make changes to their Medicare Advantage and prescription drug plans if they missed the open enrollment period or a special enrollment period due to the coronavirus pandemic. The SEP is available until July 13, 2020. 

For more information from CMS, click here.

Should Seniors Who Lose Their Job During the Coronavirus Pandemic Claim Social Security Benefits Early?

In the wake of the coronavirus pandemic, unemployment is skyrocketing. Seniors who lose their jobs may be tempted to claim Social Security benefits early, but should they, given the resulting reduction in future benefits? The answer depends on your situation, but you may be able to claim and not sacrifice much in terms of future benefits.  

While you can claim Social Security benefits as early as age 62, the better financial decision is usually to wait to take benefits as long as you are able. If you take Social Security between age 62 and your full retirement age, your benefits will be permanently reduced to account for the longer period you will be paid. Individuals who file at age 62 this year will receive 72 percent of their full benefit. On the other hand, if you delay taking retirement beyond your full retirement age, depending on when you were born, your benefit will increase by 6 to 8 percent for every year that you delay, in addition to any cost of living increases. This extra income could be very welcome, especially if you live into your 80s or beyond.

Unfortunately, many seniors who lose their job due to the coronavirus pandemic may find it necessary to apply for benefits early, potentially losing hundreds of thousands in future benefits. Before rushing to apply for early retirement benefits, you should consider all of your options. If you are lucky enough to have substantial savings, it may make sense to spend your savings rather than take benefits early. You may also be able to apply for unemployment benefits to allow you to further delay taking benefits. 

If you do not have any savings or unemployment benefits to fall back on, your only option may be to claim benefits. However, if you do claim early and then go back to work, you may have the ability to increase those benefits. If you are able to stop the benefits within 12 months of starting, you can withdraw the application, repay the benefits collected, and then still be eligible for the higher benefit amount at full retirement age or older. It is essentially a one-year interest-free loan.

If you take benefits early but are not able to stop the benefits within 12 months of starting, you can still suspend your benefits in order to earn higher benefits. For example, if you start collecting at age 62 but no longer need the income once you reach your full retirement age, you could suspend benefits until age 70. You won't get a complete do-over, but between your full retirement age and 70 you would earn delayed retirement credits, which would increase your ultimate benefit amount when you collect at age 70. 

Whatever you decide, consider all of your options carefully and talk things over with your attorney before making any rash decisions. 

For a New York Times article about taking benefits early, click here.

How Your Stimulus Check Affects Medicaid Eligibility

The coronavirus relief bill includes a direct payment to most Americans, but this has Medicaid recipients wondering how the payment will affect them. Because the payment is not income, it should not count against a Medicaid recipient’s eligibility. 

The Coronavirus Aid, Relief, and Economic Security (CARES) Act provides a one-time direct payment of $1,200 to individuals earning less than $75,000 per year ($150,000 for couples who file jointly), including Social Security beneficiaries. Individuals earning up to $99,000 ($198,000 for joint filers) will receive smaller stimulus checks. Payments are based on either 2018 or 2019 tax returns.  

The basic Medicaid rule for nursing home residents is that they must pay all of their income, minus certain deductions, to the nursing home. If the stimulus payment were considered income, it would likely have to go straight to the nursing home. Since in most states Medicaid recipients cannot have more than $2,000 in assets, there was also concern that the stimulus payments could put many recipients over the asset limit. 

In a blog post, the commissioner of the Social Security Administration (SSA) has clarified that the SSA will not consider stimulus payments as income for Supplemental Security Insurance (SSI) recipients, and the payments will be excluded from resources for 12 months. Because state Medicaid programs cannot impose eligibility requirements that are stricter than SSI requirements, the payments should not affect Medicaid eligibility.

Social Security Shutters 'Petri Dish' Offices in Response to Coronavirus Outbreak

To protect its workers and the public during the coronavirus pandemic, the Social Security Administration (SSA) has suspended face-to-face service to at its field offices and hearings offices nationwide until further notice. Payments to the nearly 70 million Social Security beneficiaries will not be affected.

While in-person appointments will still be made for certain critical services (see below), the SSA is encouraging beneficiaries to transact as much business as possible online using the agency’s website. (If you don’t have an online account yet, click here.)

Certain services also will continue to be available via the agency’s toll-free line, (800) 772-1213 or from local offices’ General Inquiry lines. (For the local office locator, click here.)

Why the Closure?

Budget cuts to Social Security over the years have led to crowded offices and long wait times.  With the advent of the coronavirus outbreak, this went from being an inconvenience to a public health threat.  The union representing the SSA’s 61,000 workers was deeply concerned about the health of the agency’s workforce as well as the danger to the public.

“The offices are petri dishes,” Richard Couture, a spokesman for the union, told The New York Times.  “People are sitting there for a long time, magnifying and multiplying the risk of infection for everyone there, and to people on the outside.”

How to Get in Touch During the Shutdown

Examples of tasks or inquiries that can be accomplished online include:

• Applying for retirement, disability, and Medicare benefits;
• Checking the status of an application or appeal;
• Requesting a replacement Social Security card (in most areas); or
• Requesting a replacement Medicare card.

(For a complete list, click here.)

Phone services will also be available, although the SSA says it is “focusing on providing specific critical services to people in dire need.” Examples of how the SSA can help by phone include:

• If you did not receive your monthly payment;
• If you are currently homeless or at risk of becoming homeless; or
• If your benefits were suspended and can now be reinstated.

Expect long wait times if calling, however.

In-Person Appointments

In-person help will still be available for a limited list of critical services, including:

• Reinstatement of benefits in dire circumstances;
• Assistance to people with severe disabilities, blindness or terminal illnesses; or
• Help for those in urgent need of eligibility decisions for Supplemental Security Income or Medicaid eligibility related to work status.

If you require such services, you must call in advance; there are no walk-ins at the field offices.

What if you already had a standing appointment or disability hearing scheduled?  If this is the case, the SSA will call you to reschedule or to take care of the issue by phone. Unfortunately, this call may come from a private phone number rather than from a government phone because employees are working remotely and do not necessarily have government-issued phones. Identity theft phone scams where callers impersonate SSA workers were already on the rise, and this will likely only add to beneficiaries' confusion. Be aware that agency employees will never inform you that your Social Security number has been suspended, demand payment, or seek credit card information.  (Scams taking advantage of the situation have already started.)

For full details on changes to SSA services brought on by the response to the coronavirus, go to the SSA’s Social Security & Coronavirus page, https://www.ssa.gov/coronavirus/

If you are enrolling in Medicare, you can get free counseling from your State Health Insurance Assistance Program (SHIP).  To find your state program, click here.  

How Secure Is Social Security?

For years people have been worried about Social Security’s future, but what is the actual outlook? According to the federal government, unless Congress acts to intervene, Social Security shortfalls are expected beginning in 2035.   

Social Security retirement benefits are financed primarily through dedicated payroll taxes paid by workers and their employers, with employees and employers splitting the tax equally. Employers pay 6.2 percent of an employee's income into the Social Security system, and the employee kicks in the same. Self-employed individuals pay the entire 12.4 percent Social Security payroll tax. This money is put into a trust fund that is used to pay retiree benefits. 

The trustees of the Social Security trust fund have reported that if Congress doesn’t take action, the fund’s balance will reach zero in 2035. This is because more people are retiring than are working, so the program is paying out more in benefits than it is taking in. Additionally, seniors are living longer, so they receive benefits for a longer period of time. 

Once the fund runs out of money, it does not mean that benefits stop altogether. Instead, retirees’ benefits would be cut. According to the trustees’ projections, the fund’s income would be sufficient to pay retirees 77 percent of their total benefit. 

Congress can act to shore up Social Security before this happens. Some ideas include eliminating the cap on benefits. Right now, workers only pay Social Security tax on the first $137,700 of income (in 2020). That amount can be increased, so that higher-earning workers pay more in taxes. The Social Security tax or the retirement age could also be increased.

Social Security is immensely popular and lawmakers are unlikely to allow steep benefit cuts to take place. The last time the program was in financial trouble and received a major overhaul was in 1983, when President Ronald Reagan and congressional Democrats struck a deal to increase taxes and gradually raise the retirement age from 65 to 67.

For more information about a the potential Social Security shortfall, click here and here.

Medicare Premiums to Increase By Almost $10 a Month in 2020

After small or no increases the past couple of years, Medicare’s Part B premium will rise sharply in 2020. The basic monthly premium will increase $9.10, from $135.50 a month to $144.60. 

The Centers for Medicare and Medicaid Services (CMS) announced the premium increase on November 8, 2019. Not everyone will pay the whole increase, however. Due to a "hold harmless" rule around 70 percent of Medicare recipients' premiums will not increase more than Social Security benefits, and Social Security benefits are increasing only 1.6 percent in 2020. This “hold harmless” provision does not apply to about 30 percent of Medicare beneficiaries: those enrolled in Medicare but who are not yet receiving Social Security, new Medicare beneficiaries, seniors earning more than $87,000 a year, and "dual eligibles" who get both Medicare and Medicaid benefits.

Meanwhile, the Part B deductible will go from $185 to $198 in 2020, while the Part A deductible will go up by $44, to $1,408. For beneficiaries receiving skilled care in a nursing home, Medicare's coinsurance for days 21-100 will increase from $170.50 to $176. Medicare coverage ends after day 100. CMS attributed the sudden steep rise in Part B premiums and deductibles on the increased costs of physician-administered drugs.

Here are all the new Medicare payment figures:

• Part B premium: $144.60 (was $135.50)
• Part B deductible: $198 (was $185)
• Part A deductible: $1,408 (was $1,364)
• Co-payment for hospital stay days 61-90: $352/day (was $341)
• Co-payment for hospital stay days 91 and beyond: $704/day (was $682)
• Skilled nursing facility co-payment, days 21-100: $176/day (was $170.50)

So-called "Medigap" policies can cover some of these costs.

Premiums for higher-income beneficiaries ($87,000 and above) are as follows: 

• Individuals with annual incomes between $87,000 and $109,000 and married couples with annual incomes between $174,000 and $218,000 will pay a monthly premium of $202.40.
• Individuals with annual incomes between $109,000 and $136,000 and married couples with annual incomes between $218,000 and $272,000 will pay a monthly premium of $289.20.
• Individuals with annual incomes between $136,000 and $163,000 and married couples with annual incomes between $272,000 and $326,000 will pay a monthly premium of $376.00.
• Individuals with annual incomes above $163,000 and less than $500,000 and married couples with annual incomes above $326,000 and less than $750,000 will pay a monthly premium of $462.70.
• Individuals with annual incomes above $500,000 and married couples with annual incomes above $750,000 will pay a monthly premium of $491.60.

Rates differ for beneficiaries who are married but file a separate tax return from their spouse. Those with incomes greater than $87,000 and less than $413,000 will pay a monthly premium of $462.70. Those with incomes greater than $413,000 will pay a monthly premium of $491.60.

The Social Security Administration uses the income reported two years ago to determine a Part B beneficiary's premiums. So the income reported on a beneficiary's 2018 tax return is used to determine whether the beneficiary must pay a higher monthly Part B premium in 2020. Income is calculated by taking a beneficiary's adjusted gross income and adding back in some normally excluded income, such as tax-exempt interest, U.S. savings bond interest used to pay tuition, and certain income from foreign sources. This is called modified adjusted gross income (MAGI). If a beneficiary's MAGI decreased significantly in the past two years, she may request that information from more recent years be used to calculate the premium. You can also request to reverse a surcharge if your income changes.

Those who enroll in Meidcare Advantage plans may have different cost-sharing arrangements. CMS estimates that the Medicare Advantage  average monthly premium will decrease by 14 percent in 2020, from an average of $26.87 in 2019 to $23 in 2020.

For Medicare’s press release announcing the new premium and deductible amounts, click here.

The 2020 Social Security Increase Will Be Smaller than 2019's

The Social Security Administration has announced a 1.6 percent increase in benefits in 2020, nearly half of last year's change. The small rise has advocates questioning whether the government is using the proper method to calculate the cost of living for older Americans and those with disabilities.

Cost-of-living increases are tied to the consumer price index, and a modest upturn in inflation rates and gas prices means Social Security recipients will get only a small boost in 2020. The 1.6 percent increase is lower than last year’s 2.8 percent rise and the 2 percent increase in 2018. The average monthly benefit of $1,479 in 2019 will go up by $24 a month to $1,503 a month for an individual beneficiary, or $288 yearly. 

The cost-of-living change also affects the maximum amount of earnings subject to the Social Security tax, which will grow from $132,900 to $137,700. 

For 2020, the monthly federal Supplemental Security Income (SSI) payment standard will be $783 for an individual and $1,175 for a couple.

The smaller increase may mean that additional income will be entirely eaten up by higher Medicare Part B premiums. The standard monthly premium for Meidcare Part B enrollees is forecast to rise $8.80 a month to $144.30. According to USA Today, advocates are questioning the method used to calculate cost-of-living increases. The Bureau of Labor Statistics uses the Consumer Price Index for Urban Wage Earners and Clerical Workers to set the inflation rate. This method looks at prices for gasoline, electronics, and other items that younger workers rely on. The advocates suggest using a different index (the Consumer Price Index for Elderly) that puts greater emphasis on medical and housing expenses. 

Most beneficiaries will be able to find out their cost-of-living adjustment online by logging on to my Social Security in December 2019. While you will still receive your increase notice by mail, in the future you will be able to choose whether to receive your notice online instead of on paper.

For more on the 2020 Social Security benefit levels, click here.

Medicare Premiums to Increase By Almost $10 a Month in 2020

After small or no increases the past couple of years, Medicare’s Part B premium will rise sharply in 2020. The basic monthly premium will increase $9.10, from $135.50 a month to $144.60. 

The Centers for Medicare and Medicaid Services (CMS) announced the premium increase on November 8, 2019. Not everyone will pay the whole increase, however. Due to a "hold harmless" rule around 70 percent of Medicare recipients' premiums will not increase more than Social Security benefits, and Social Security benefits are increasing only 1.6 percent in 2020. This “hold harmless” provision does not apply to about 30 percent of Medicare beneficiaries: those enrolled in Medicare but who are not yet receiving Social Security, new Medicare beneficiaries, seniors earning more than $87,000 a year, and "dual eligibles" who get both Medicare and Medicaid benefits.

Meanwhile, the Part B deductible will go from $185 to $198 in 2020, while the Part A deductible will go up by $44, to $1,408. For beneficiaries receiving skilled care in a nursing home, Medicare's coinsurance for days 21-100 will increase from $170.50 to $176. Medicare coverage ends after day 100. (For more information about Medicare's nursing home coverage, click here.) CMS attributed the sudden steep rise in Part B premiums and deductibles on the increased costs of physician-administered drugs.

Here are all the new Medicare payment figures:

• Part B premium: $144.60 (was $135.50)
• Part B deductible: $198 (was $185)
• Part A deductible: $1,408 (was $1,364)
• Co-payment for hospital stay days 61-90: $352/day (was $341)
• Co-payment for hospital stay days 91 and beyond: $704/day (was $682)
• Skilled nursing facility co-payment, days 21-100: $176/day (was $170.50)

So-called "Medigap" policies can cover some of these costs. For more information about Medigap, click here.

Premiums for higher-income beneficiaries ($87,000 and above) are as follows: 

• Individuals with annual incomes between $87,000 and $109,000 and married couples with annual incomes between $174,000 and $218,000 will pay a monthly premium of $202.40.
• Individuals with annual incomes between $109,000 and $136,000 and married couples with annual incomes between $218,000 and $272,000 will pay a monthly premium of $289.20.
• Individuals with annual incomes between $136,000 and $163,000 and married couples with annual incomes between $272,000 and $326,000 will pay a monthly premium of $376.00.
• Individuals with annual incomes above $163,000 and less than $500,000 and married couples with annual incomes above $326,000 and less than $750,000 will pay a monthly premium of $462.70.
• Individuals with annual incomes above $500,000 and married couples with annual incomes above $750,000 will pay a monthly premium of $491.60.

Rates differ for beneficiaries who are married but file a separate tax return from their spouse. Those with incomes greater than $87,000 and less than $413,000 will pay a monthly premium of $462.70. Those with incomes greater than $413,000 will pay a monthly premium of $491.60.

The Social Security Administration uses the income reported two years ago to determine a Part B beneficiary's premiums. So the income reported on a beneficiary's 2018 tax return is used to determine whether the beneficiary must pay a higher monthly Part B premium in 2020. Income is calculated by taking a beneficiary's adjusted gross income and adding back in some normally excluded income, such as tax-exempt interest, U.S. savings bond interest used to pay tuition, and certain income from foreign sources. This is called modified adjusted gross income (MAGI). If a beneficiary's MAGI decreased significantly in the past two years, she may request that information from more recent years be used to calculate the premium. You can also request to reverse a surcharge if your income changes.

Those who enroll in Medicare Advantage plans may have different cost-sharing arrangements. CMS estimates that the Medicare Advantage average monthly premium will decrease by 14 percent in 2020, from an average of $26.87 in 2019 to $23 in 2020.

For Medicare’s press release announcing the new premium and deductible amounts, click here.  

For more about Medicare, click here.  

Most Are Taking Social Security at the Wrong Time

A new report finds that almost no retirees are making financially optimal decisions about when to take Social Security and are losing out on more than $100,000 per household in the process. The average Social Security recipient would receive 9 percent more income in retirement if they made the financially optimal decision.

When claiming Social Security, you have three options: You may begin taking benefits between age 62 and your full retirement age, you can wait until your full retirement age, or you can delay benefits and take them anytime up until you reach age 70. If you take Social Security between age 62 and your full retirement age, your benefits will be reduced to account for the longer period you will be paid. If you delay taking retirement, depending on when you were born, your eventual benefit will increase by 6 to 8 percent for every year that you delay, in addition to any cost-of-living increases. 

The new report , conducted by United Income, an online investment management and financial planning firm, found that only 4 percent of retirees make the financially optimal decision about when to claim Social Security. Nearly all of the retirees not optimizing their benefits are claiming benefits too early. The study found that 57 percent of retirees would build more wealth if they waited to claim until age 70. However, currently more than 70 percent of retirees claim benefits before their full retirement age. Claiming before full retirement is the financially best option for only 6.5 percent of retirees, according to United Income. 

The consequences of claiming Social Security too early can be big. The report found that collecting benefits at the wrong time causes retirees to collectively lose $3.4 trillion in potential income (an average of $111,000 per household). The report also estimates that elderly poverty could be cut in half if retirees claimed benefits at the financially optimal time. 

One reason most people do not optimize Social Security is because waiting to collect benefits means their overall wealth may fall during their 60s and 70s. They also may not be aware that collecting benefits before full retirement age means that their benefits will be permanently reduced. According to the report’s authors, policy changes are necessary to get retirees to wait to claim benefits. The report recommends that early claiming be made the exception and reserved for those who have a demonstrable need to collect early. Another recommendation is to change the label on early retirement and call it the "minimum benefit age."

Maximizing Social Security Survivor's Benefits 取得社會安全遺屬最大的利益 (中英對照)

Social Security survivor's benefits provide a safety net to widows and widowers. But to get the most out of the benefit, you need to know the right time to claim. 

While you can claim survivor's benefits as early as age 60, if you claim benefits before your full retirement age, your benefits will be permanently reduced. If you claim benefits at your full retirement age, you will receive 100 percent of your spouse's benefit or, if your spouse died before collecting benefits, 100 percent of what your spouse's benefit would have been at full retirement age. Unlike with retirement benefits, delaying survivor's benefits longer than your full retirement age will not increase the benefit. If you delay taking retirement benefits past your full retirement age, depending on when you were born your benefit will increase by 6 to 8 percent for every year that you delay up to age 70, in addition to any cost of living increases.

You cannot take both retirement benefits and survivor's benefits at the same time. When deciding which one to take, you need to compare the two benefits to see which is higher. In some cases, the decision is easy—one benefit is clearly much higher than the other. In other situations, the decision can be a little more complicated and you may want to take your survivor's benefit before switching to your retirement benefit. 

To determine the best strategy, you will need to look at your retirement benefit at your full retirement age as well as at age 70 and compare that to your survivor's benefit. If your retirement benefit at age 70 will be larger than your survivor's benefit, it may make sense to claim your survivor's benefit at your full retirement age. You can then let your retirement benefit continue to grow and switch to the retirement benefit at age 70. 

Example: A widow has the option of taking full retirement benefits of $2,000/month or survivor's benefits of $2,100/month. She can take the survivor's benefits and let her retirement benefits continue to grow. When she reaches age 70, her retirement benefit will be approximately $2,480/month, and she can switch to retirement benefits. Depending on the widow's life expectancy, this strategy may make sense even if the survivor's benefit is smaller than the retirement benefit to begin with. 

Keep in mind that divorced spouses are also entitled to survivor's benefits if they were married for at least 10 years. If you remarry before age 60, you are not entitled to survivor's benefits, but remarriage after age 60 does not affect benefits. In the case of remarriage, you may need to factor in the new spouse's spousal benefit when figuring out the best way to maximize benefits. 

社會安全遺屬福利為寡婦和鰥夫提供安全網。但是為了充分利用這些福利，您需要知道申請的正確時間。

雖然您可以在60歲之前申請遺屬福利，但如果您在退休年齡之前領取福利金，您的福利將永久地減少。如果您在完全退休年齡領取福利金，您將獲得配偶所有的福利，或者如果您的配偶在領取福利金之前去世，您將拿到配偶在完全退休時的全部福利。與退休福利不同，延遲申請遺屬福利的時間到完全退休年齡後並不會增加福利。如果您延遲領取您的退休福利到您的完全退休年齡後，根據您出生的時間，不包括每年生活指數的調整，您延遲到70歲時每年福利將增加6%至8%。

您不能同時享受退休福利和遺屬福利。在決定取哪一種時，您要比較一下兩種之中哪一種收益比較高。在某些情況下，很容易就可以決定 –其中 一個利益顯然比另一個好得多。在其他情況下，可能會稍微複雜一些，您可能希望先獲得遺屬福利，後才是退休福利。

要確定最佳策略，您需要查看您在完全退休年齡時和70歲時的退休福利，並將之與遺屬福利進行比較。如果您在70歲時的退休福利金額大於您的遺屬福利金，那麼在您的完全退休年齡申請您的遺屬福利可能更合理。然後，您可以讓您的退休福利金繼續增長，並在70歲時轉為退休福利。

示例：一名寡婦可以選擇每月2,000美元的全額退休福利或每月2,100美元的遺屬福利。她可以獲得遺屬福利同時讓她的退休福利金繼續增長。當她達到70歲時，她的退休福利將約為每月2,480美元，她可以轉為退休福利。根據寡婦的預期壽命，即使遺屬福利小於退休福利，這種策略也可能更合理。

請緊記，如果離婚配偶結婚超過10年，他們也有權享有遺屬福利。如果您在60歲之前再婚，您無權享有遺屬福利，但60歲以後再婚不會影響福利。在再婚的情況下，您可能需要考慮新配偶的配偶福利，同時找出最大利益的最佳方法。