TN 4 (07-11)

HI 01101.033 IRMAA and Equitable Relief

A. Background

Centers for Medicare & Medicaid Services’ (CMS) policy includes equitable relief for Medicare beneficiaries who pay an income-related monthly adjustment amount for Medicare Part B (IRMAA-B), Medicare Part D (IRMAA-D) or both when the arrearage exceeds the limits in HI 01101.033B. The equitable relief guidelines in this section follow the guidelines in sections HI 00805.170 through HI 00805.240.

Most equitable relief IRMAA cases will occur after annual verification HI 01130.000. Some IRMAA cases will meet the guidelines found in the section below at other times in the year.

B. When equitable relief applies to IRMAA

Arrearage notices will include an equitable relief paragraph that allows the beneficiary to request other ways (e.g., installment plan) to pay the arrearage in the following situations:

  • When a beneficiary has IRMAA-B, equitable relief will apply to the IRMAA-B arrearage when the amount of the arrearage is greater than five times the current Part B standard premium plus the current IRMAA-B.

    Computation model: 5 x (current standard Part B premium + current IRMAA-B).

    NOTE: The current standard Part B premium is the premium for the current processing year.

  • When a beneficiary has IRMAA-D, equitable relief will apply to the IRMAA-D arrearage if the amount of the arrearage is greater than five times the current base beneficiary premium plus the current IRMAA-D.

    Computation model: 5 x (current base beneficiary premium + current IRMAA-D).

    NOTE: CMS calculates the base beneficiary premium annually. The current base beneficiary premium is the premium for the current processing year.

  • When a beneficiary is eligible for Medicare Part B equitable relief, has an IRMAA-D arrearage (regardless of the IRMAA-D arrearage amount), and requests payment of the arrearages by installments, combine the IRMAA-D arrearage with the Part B installment plan.

  • When a beneficiary is eligible for equitable relief on IRMAA-D but not on IRMAA-B and requests to pay the arrearages by installments, do not combine the IRMAA-B arrearage with the IRMAA-D installment plan.

    NOTE: Beneficiaries who experience severe financial hardship can request a waiver of their arrearages. For more information, see HI 00805.220H and HI 00805.220I.

C. Examples of retroactive equitable relief for IRMAA

1. Example of Part B equitable relief:

The beneficiary is entitled to Medicare Part B and paid the standard Medicare Part B premium for 01/11-12/11. In current operating month (COM) 12/11, SSA determines that the beneficiary should have paid level three IRMAA ($184.50) for 2011. The beneficiary owes retroactive IRMAA-B totaling $2,214.00 ($184.50 for each month of 01/11-12/11). Since this amount exceeds five times the current standard Part B premium plus the current IRMAA-B amount (5 x ($115.40 + $184.50) = $1,499.50), the arrearage notice includes an equitable relief paragraph.

2. Example of Medicare Part D equitable relief:

The beneficiary enrolled in a Medicare Part D plan for 2011 (but not Part B) and paid the plan’s monthly premium amount for 01/11-12/11. In COM 12/11, SSA determined that the beneficiary should have been paying level three IRMAA ($50.10) for 2011. The beneficiary owes retroactive IRMAA-D totaling $601.20 ($50.10 for each month of 01/11-12/11). Since the amount exceeds five times the base beneficiary premium plus IRMAA-D (5 x ($32.34+$50.10) = $412.20), the arrearage notice includes an equitable relief paragraph.

3. Example of Medicare Part B and Part D equitable relief:

The beneficiary is entitled to Medicare Part B and paid the standard Part B premium. In 02/11, the beneficiary enrolled in a Medicare Part D plan and paid the plan’s monthly premium amount. In COM 12/11, SSA determines that the beneficiary should have been paying IRMAA level three. Equitable relief applies to the Part B premium since the Part B arrearage of $2,214.00 ($184.50 for each month of 01/11-12/11) is greater than five times the current standard premium including the current IRMAA-B (5 x ($115.40 +$184.50) = $1,499.50). Since there is also an IRMAA-D arrearage of $551.10 ($50.10 for each month of 02/11-12/11), the IRMAA-D arrearage is added to the Part B arrearage as amounts due to be collected from the title II payment.

D. References