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 2014 information as prepared by Lauren McLarney, governmental affairs specialist, NFB Advocacy and Policy Department:
Another year, another set of annual adjustments to Social Security Disability Insurance (SSDI), Supplemental Security Income (SSI), and Medicare programs. The updated amounts for 2014 are listed below. These numbers include new tax rates, higher exempt earnings amounts (substantial gainful activity), and cost-of-living increases. They also include deductible, premium, and coinsurance amounts under Part A and B of Medicare.
FICA and Self-Employment Tax Rates: The FICA tax rate for employees and their employers is a combination of payments to the Old Age, Survivors, and Disability Insurance (OASDI) Trust Fund, and the Hospital Insurance (HI) Trust Fund, from which payments under Medicare are made. In other words, the tax rate is the combined rate for Social Security and Medicare. The total tax rate for 2013 was 7.65 percent for employees and their employers and 15.3 percent for self-employed workers. These percentages are unchanged for 2014. Please note that as of January 2013 individuals with earned income of more than $200,000 ($250,000 for married couples filing jointly) pay an additional 0.9 percent in Medicare taxes. The tax rates listed above for 2013 and 2014 do not include that additional 0.9 percent.
Ceiling on Earnings Subject to Tax: In 2013 the ceiling on taxable earnings for contributions to the OASDI Trust Fund was $113,700. For 2014 the maximum amount of taxable earnings will be $117,000. All earnings are taxed for the HI Trust Fund.
Quarters of Coverage: Eligibility for Retirement, Survivors, and Disability Insurance 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. The rationale behind the quarter-of-coverage concept is that a person must have contributed to the system before being eligible to collect benefits from it. The quarters of coverage are a way of measuring how much one has contributed to the system. In 2013 a quarter of coverage was credited for earnings of $1,160 in any calendar quarter. Anyone who earned $4,640 in 2013 (regardless of when the earnings occurred during the year) received four quarters of coverage. In 2014 a quarter of coverage will be credited for earnings of $1,200 during a calendar quarter. Four quarters will be credited for annual earnings of $4,800.
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 2013 the amount was $750. This amount will increase to $770 in 2014. 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 is referred to as Substantial Gainful Activity (SGA). This is a measurement used to determine whether a beneficiary is earning enough income that he or she may be deemed ineligible for benefits, and is calculated as a person’s monthly income before taxes, minus any unearned (or subsidy) income and any impairment-related work expense deductions. In 2013 the SGA for a blind person receiving disability benefits was $1,740. In 2014 this number will increase to $1,800 per month. This means that in 2014 a blind SSDI beneficiary who earns $1,801 or more a month (before taxes but after subtractions of subsidy incomes and impairment-related work expenses) will be deemed to have exceeded SGA and will likely no longer be eligible for benefits.
Social Security Benefit Amounts: There will be a 1.5 percent cost-of-living adjustment (COLA) for beneficiaries in 2014. Increased payments to beneficiaries will begin in December of 2013 and will apply to everyone receiving benefits in 2014.
Standard SSI Benefit Increase: Beginning January 2014 the federal payment amounts for SSI individuals and couples are as follows: individuals, $721 a month; SSI couples, $1,082 a month.
Student Earned Income Exclusion: In 2013 the monthly amount was $1,730, and the maximum yearly amount was $6,960. In 2014 the monthly amount will be $1,750, and the maximum yearly amount will be $7,060. The SSI program applies strict asset limits of $2,000 for individuals and $3,000 for couples, which can be changed only by Congress.
Medicare Deductibles and Coinsurance: Medicare Part A coverage provides hospital insurance to most Social Security beneficiaries. The coinsurance amount is the hospital charge to a Medicare beneficiary for any hospital stay. Medicare then pays the hospital charges above the beneficiary's coinsurance amount.
The Part A hospital inpatient deductible was $1,184 in 2013 and will increase to $1,216 in 2014. The coinsurance charged for hospital services within a benefit period of no longer than sixty days was $0 in 2013 and will stay at $0 in 2014. From the sixty-first day through the ninetieth day, the daily coinsurance amount was $296 a day in 2013, and will slightly increase in 2014 to $304 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 paid during each reserve day used in 2013 was $592. In 2014 the coinsurance for each reserve day will be $608.
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 $148 in 2013 and will increase to $152 for 2014.
Most Social Security beneficiaries have no monthly premium charge for Medicare Part A coverage. Those who become ineligible for SSDI 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 2013 was $441 a month. In 2014 the premium rate for Part A coverage will reduce to $426.
The annual deductible amount for Medicare Part B (medical insurance) in 2013 was $147. That amount will not change in 2014. The Medicare Part B monthly premium rate charged to each new beneficiary or to those beneficiaries who directly pay their premiums quarterly for 2013 was $104.90 a month, and again that amount will not change in 2014. 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.
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). To qualify for the QMB program in 2013, an individual’s monthly income could not exceed $978 and a married couple’s monthly income could not exceed $1,313. A note on the Medicare website says: “These amounts may increase in 2014.”
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 the following: Medicare's hospital deductible amount, which will be $1,216 per benefit period in 2014; the daily coinsurance charges for extended hospital and skilled nursing facility stays; the Medicare Part B (Medical Insurance) premium, which will be $104.90 a month in 2014, unless you are currently receiving benefits from Social Security and the agency is automatically withholding your Part B premiums; the 2014 $147 annual Part B deductible; and the 20 percent coinsurance for services covered by Medicare Part B, depending on which doctor you go to (these services include doctor services, outpatient therapy, and durable medical equipment).
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 number (800) 633-4227, or go online to <http://www.cms.hhs.gov/ContactCMS>.