WASHINGTON (CN) – The Social Security Administration is sticking to its 2010 plan regarding what will be considered “major life-changing events” potentially allowing for lower Medicare Part B co-payments.
The rule, which now has been finalized, also addresses the evidence required to support a claim of a major life-changing event.
The rule is meant to allow the agency to respond appropriately to circumstances brought about by the current economic climate and other unforeseen event.
Under the rule, if a Medicare beneficiary provides evidence that the qualifying major life-changing event significantly reduced his or her modified adjusted gross income, the agency will determine how much the beneficiary pays based on data from a more recent tax year.
Before the 2010 rule change, Medicare already was taking into account the life changes of: marriage, divorce, annulment of a marriage, death of a spouse, reduced hours or stoppage of work, reductions in income due to certain losses of income-producing property, a reduction in or loss of income due to a scheduled cessation of a pension, or a reduction in or loss of income from an insured pension plan due to termination or reorganization of the plan.
Since the 2010 rule change, major life-changing events also have included the receipt of settlement payments from an employer or former employer as a result of an employer’s or former employer’s closure, bankruptcy, or reorganization, and the loss of investment property as a result of fraud or theft due to a criminal act by a third party.
Due to previous misinterpretations, the agency also clarified that the loss of income-producing property due to the ordinary risk of investment is not a major life-changing event, and that events that result in the loss of dividend income because of the ordinary risk of investment are not considered to be major life-changing events.
The 2010 rule change also added that a reduction in or loss of income from an employer’s pension plan due to termination or reorganization of the pension plan or a scheduled cessation of pension qualifies as a major life-changing event, whether or not the plan was insured.
The evidence required for a loss of income-producing property due to criminal fraud or theft by a third party is proof of the conviction, such as a court document, and evidence of loss. If a beneficiary or his or her spouse experiences a scheduled cessation, termination, or reorganization of an employer’s pension plan, the agency requires evidence documenting the change in or loss of the pension. If a beneficiary or his or her spouse receives a settlement from an employer or a former employer because of the employer’s closure, bankruptcy, or reorganization, the agency requires evidence documenting the settlement and the reasons for the settlement.
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