by Lauren McLarney
From the Editor: Every December we publish the Social Security figures that have been announced for the coming year. Here is the 2011 information as prepared by Lauren McLarney of the NFB Governmental Affairs Department:
Once again we toast the passing of the old year while awaiting the new one. Along with the inevitable best-of lists and retrospectives, this passing of time is accompanied by annual adjustments to Social Security Disability Insurance (SSDI), Supplemental Security Income (SSI), and Medicare programs. The changes traditionally include new tax rates, higher exempt earnings amounts, and SSDI and SSI cost-of-living increases, as well as alterations to deductible and coinsurance requirements under Medicare. Below are the updated facts for 2011.
FICA and Self-Employment Tax Rates: The FICA tax rate for employees and their employers remains unchanged at 7.65 percent. This rate includes payments to the Old Age, Survivors, and Disability Insurance (OASDI) Trust Fund of 6.2 percent and an additional 1.45 percent payment to the Hospital Insurance (HI) Trust Fund, from which payments under Medicare are made. Self-employed people continue to pay a Social Security tax of 15.3 percent, which includes 12.4 percent paid to the OASDI Trust Fund and 2.9 percent paid to the HI Trust Fund.
Ceiling on Earnings Subject to Tax: During 2010 the ceiling on taxable earnings for contributions to the OASDI Trust Fund was $106,800. For 2011 the maximum amount of taxable earnings remains unchanged. All earnings are taxed for the HI Trust Fund.
Social Security Disability Insurance
For the second consecutive year there will be no cost-of-living adjustment (COLA) for 2011, resulting in rates, benefits, and exempt earnings amounts unchanged from 2010.
Quarters of Coverage: Eligibility for Retirement, Survivors, and Disability Insurance (RSDI) benefits is partially based on the number of quarters of coverage earned by any individual during periods of work. Anyone may earn up to four quarters of coverage in a single year. During 2010 a Social Security quarter of coverage was credited for earnings of $1,120 in any calendar quarter. Anyone who earned $4,480 in 2010 (regardless of when the earnings occurred during the year) received four quarters of coverage. Because of the decrease in the national average wage index, these amounts will not increase for 2011. Therefore, in 2011 a Social Security quarter of coverage will be credited for earnings of $1,120 during a calendar quarter. Four quarters will be earned with annual earnings of $4,480.
Trial Work Period Limit: The amount of earnings required to use a trial work month is subject to annual increases based on changes in the national average wage index. In 2010 the amount was $720. Because of the decrease in the national average wage index, this amount will remain unchanged at $720 in 2011. In cases of self-employment, a trial work month can also be used if a person works more than eighty hours, and this limitation on hours worked will not change unless expressly adjusted.
Exempt Earnings: The monthly earnings exemption referred to as Substantial Gainful Activity for blind people who receive disability insurance benefits was $1,640 of gross earned income during 2010. In 2011 earnings of $1,640 or more a month, before taxes, for a blind SSDI beneficiary will continue to indicate Substantial Gainful Activity once any unearned (or subsidy) income is subtracted and all deductions for impairment-related work expenses are applied. The figure for 2011 has not changed. Just as in 2010, no COLA will be received.
Social Security Benefit Amounts: Again, the Social Security Administration announced that no cost-of-living increase will be applied to benefits paid in 2011.
Supplemental Security Income
Standard SSI Benefit Increase: Beginning January 2011, the federal payment amounts for SSI individuals and couples are as follows: individuals, $674 a month; SSI couples, $1,011 a month. These amounts are the same as the 2010 levels.
Student Earned Income Exclusion: The Student Earned Income Exclusion is generally adjusted each year, but, because of the absence of a COLA, the exclusion remains unchanged in 2011. In 2010 the monthly amount was $1,640, and the maximum yearly amount was $6,600. The SSI program applies strict asset (resource) limits of $2,000 for individuals and $3,000 for SSI couples, which can be changed only by Congress.
The Department of Health and Human Services has not announced the deductibles, coinsurance amounts, and premiums for 2011, but follow developments in the Braille Monitor to remain current on those data. Below are the known facts for 2011:
Medicare Deductibles and Coinsurance: Medicare Part A coverage provides hospital insurance to most Social Security beneficiaries. The coinsurance payment is the charge that the hospital makes to a Medicare beneficiary for any hospital stay. Medicare then pays the hospital charges above the beneficiary's coinsurance amount.
The Part A coinsurance amount charged for hospital services within a benefit period of not longer than sixty days was $1,100 in 2010. From the sixty-first day through the ninetieth day, the daily coinsurance amount was $275 a day. Each Medicare beneficiary has sixty lifetime reserve days that may be used after a ninety-day benefit period has ended. Once used, these reserve days are no longer available after any benefit period. The coinsurance amount to be paid during each reserve day used in 2010 is $550. The 2011 coinsurance amounts for services covered by Part A have not yet been announced.
Part A of Medicare pays all covered charges for services in a skilled nursing facility for the first twenty days following a three-day in-hospital stay within a benefit period. From the twenty-first day through the one hundredth day in a benefit period, the Part A coinsurance amount for services received in a skilled nursing facility was $137.50 in 2010. There has been no indication whether this amount will increase in 2011.
Most Social Security beneficiaries have no monthly premium charge for Medicare Part A coverage. Those who become ineligible for SSDI cash benefits can continue to receive Medicare Part A coverage premium-free for at least ninety-three months after the end of a trial work period. After that time the individual may purchase Part A coverage. The premium rate for this coverage during 2010 was $461 a month. Again, it has not yet been announced whether this premium will increase in 2011. The Braille Monitor will publish the 2011 Medicare Part A coinsurance amounts and premiums as soon as the information is made public.
In 2010 the Medicare Part B (medical insurance) deductible was $155. This is an annual deductible amount. The Medicare Part B monthly premium rate charged to each new beneficiary or to those beneficiaries who directly pay their premiums quarterly for 2010 was $110.50 a month. It has not been announced whether this deductible will increase in 2011. For those receiving Social Security benefits, this premium payment is deducted from your monthly benefit check. Individuals who remain eligible for Medicare but are not receiving Social Security benefits because of working, must directly pay the Part B premium quarterly—one payment every three months. Like the Part A premiums mentioned above, Part B is also available for at least ninety-three months following the Trial Work Period assuming an individual wishes to have it and, when not receiving SSDI, continues to make quarterly premium payments.
Although there is no COLA for 2011, there is still a possibility that the Medicare Part B premium will increase. If the Medicare Part B premium does increase in 2011, the law contains a “hold harmless” provision that will protect more than 70 percent of beneficiaries from paying a higher premium. This provision is meant to protect beneficiaries from a reduction in net Social Security benefits that could occur when an increase in Medicare Part B premiums occurs without any change in benefits. According to the Social Security Administration, those not protected by the “hold harmless” provision include higher income beneficiaries subject to an income-adjusted Part B premium and beneficiaries newly entitled to Part B in 2011. The 20 percent of beneficiaries that have their Medicare Part B premiums paid by state medical assistance programs will see no change in their net benefits because the state will be required to pay any premium increases, should they occur. The Braille Monitor will publish the 2011 Medicare Part B premium as soon as the information is made public.
Programs That Help with Medicare Deductibles and Premiums: Low-income Medicare beneficiaries may qualify for help with payments. Assistance is available through two programs—the QMB (Qualified Medicare Beneficiary program) and the SLMB (Specified Low-Income Medicare Beneficiary program). For the QMB program an individual’s income cannot exceed 100 percent of the Federal Poverty Guidelines, also called the Federal Poverty Level. Individuals qualify for the SLMB program when income is greater than 100 percent, but less than 120 percent, of the Federal Poverty Guidelines. The 2010 guidelines were delayed because of legislative action and then published with Alaska and Hawaii having higher amounts than are applicable to forty-eight of the fifty states and the District of Columbia. The 2011 guidelines are expected to be published in late January.
Under the QMB program states are required to pay the Medicare Part A (Hospital Insurance) and Part B (Medical Insurance) premiums, deductibles, and coinsurance expenses for Medicare beneficiaries who meet the program's income and resource requirements. Under the SLMB program states pay only the full Medicare Part B monthly premium. Eligibility for the SLMB program may be retroactive for up to three calendar months.
Both the QMB and SLMB programs are administered by the Centers for Medicare and Medicaid Services in conjunction with the states. The rules vary from state to state, but the following can be said: Resources, such as bank accounts or stocks, may not exceed $4,000 for one person or $6,000 for a family of two. Resources are generally things you own. However, not everything is counted. The house you live in, for example, doesn't count; and generally one car also doesn't count.
If you qualify for assistance under the QMB program, you will not have to pay:
If you qualify for assistance under the SLMB program, you will be responsible for the payment of all of the items listed above except for the monthly Part B premium, depending on your circumstances.
If you think you qualify but you have not filed for Medicare Part A, contact Social Security to find out if you need to file an application. Further information about filing for Medicare is available from your local Social Security office or Social Security's toll-free number (800) 772-1213.
Remember that only your state can decide if you are eligible for help from the QMB or SLMB program and also that the income and resource levels listed here are general guidelines with some states choosing greater amounts. Therefore, if you are elderly or disabled, have low income and very limited assets, and are a Medicare beneficiary, contact your state or local Medicaid office (referred to in some states as the Public Aid Office or the Public Assistance Office) to apply. For more information about either program, call the Centers for Medicare and Medicaid Services (CMS) on its toll-free telephone number (800) 633-4227, or go online to <http://www.cms.hhs.gov/ContactCMS>.