What Makes Medicare Different for Everyone?
June 1, 2022
What Makes Medicare Different for Everyone?

One of the ways that Medicare can be different for some is with the cost of the Medicare Part B premium. The Part B premium has a standard rate. If you have a higher income, you will pay an Income Related Monthly Adjusted Amount, also known as an IRMAA. Most people will pay the standard rate. However, if your modified adjusted gross income that was reported on your tax return from two years ago is above a certain amount, you will pay the standard rate plus the IRMAA. If you do not pay your IRMAA you could lose your Medicare coverage.


This amount generally changes every year. You can find the current IRMAA amounts on the Social Security website.


Medicare Part D and IRMAA

Medicare Part D is also subject to the IRMAA depending on your income, again from your reported income from two years ago. You will pay the IRMAA in addition to your Medicare Part D premium, whether you have a stand-alone Part D or a Medicare Advantage Plan with Part D.


The Part D IRMAA is paid directly to Medicare and not to your plan or employer. If you do not pay the Part D IRMAA, you will lose your Part D prescription coverage.


If your income has gone down, depending on specific circumstances, you may be able to get a new decision about your IRMAA.


If you are subject to an IRMAA, you will receive a notice from Social Security.


Medicare Late Enrollment Penalty (LEP)

Another way Medicare can be different for some is if they have a Late Enrollment Penalty (LEP) on their Medicare Part B premium. In most cases, this penalty will be for the rest of the time that you have Medicare. This is not a one-time penalty. If you have Medicare due to disability, your penalty will go away when you turn 65.


How is the Part B penalty calculated? For each 12-month period that you delay Part B enrollment you will have to pay a 10% premium penalty unless you are eligible for the Medicare Savings Program (MSP) or you have active job-based insurance through yourself or your spouse with more than 20 employees.


There is also a penalty for a late enrollment in a Medicare Part D plan. If you delay enrollment, you will pay a LEP of 1%, of the national base premium, in addition to your Part D plan premium. The national base premium changes every year and currently for 2021, it is $33.06. This penalty is assessed for every month that you went without a Medicare Part D or creditable coverage. Creditable coverage is coverage that is as good as or better than the Medicare Part D coverage. If you receive assistance through Social Security’s Extra Help Program, also known as LIS (Low Income Subsidy), have creditable drug coverage or prove that you received inadequate information about your drug coverage being creditable, you may not have to pay the LEP.


Like the Part B LEP, this is not a one-time penalty. The LEP for Part D, is also a penalty that you will have for as long as you have Medicare. If you are under 65 and have Medicare due to disability your LEP will go away when you turn 65.


Medicare for Those Under 65 with Disability

How does Medicare coverage for those under 65 with a disability work? Like the Initial Enrollment for a person eligible due to turning 65, there is a seven-month period to enroll in Medicare. The difference is that the enrollment period for those on disability surrounds the 25th month of disability. You will automatically receive your Medicare card and packet three months before your 25th month of disability. Your effective date will be the 1st of the month, that is your 25th month of disability. Generally, you should not delay Medicare Part B unless you have job-based insurance that pays secondary to Medicare (employer insurance with more than 20 employees). If you delay without job-based insurance as previously mentioned, you may incur a penalty. If you do not receive your card and packet, contact Social Security.


Railroad Retirement

Another scenario where Medicare will be different for some is those with Railroad Retirement.  When a person who is receiving Railroad Retirement benefits becomes eligible for Medicare, instead of enrolling in Medicare through Social Security their enrollment will be processed through the Railroad Retirement Board (RRB). They would be automatically enrolled in Medicare Parts A & B.


If the person is not collecting Railroad Retirement benefits when turning 65, they should contact the Railroad Retirement Board (RRB) to enroll. The RRB will collect the Medicare premiums and the Medicare Part B premium should be automatically deducted from their monthly check. Additionally, the doctor’s and providers will send claims to the Railroad Medicare Part B Claims Contractor selected by the RRB. It is important to make providers aware that the Medicare is Railroad Medicare. The Medicare card will look different. It will have RAILROAD RETIRMENT BOARD labeled at the bottom of the card and an insignia at the top left, for the RRB. Finally, if you are under 65 and disabled, you will have different eligibility criteria depending on how the RRB classifies your disability.


For additional information go to www.rrb.gov or reach out to Simco.


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Top 5 HR Trends That Will Shape Businesses in 2025

January 7, 2025
As 2025 kicks off, the HR landscape is evolving faster than ever before. Technology, shifting workforce expectations, and the need for businesses to be agile in a dynamic global environment are all driving change. What worked yesterday may not be enough today, and companies must adapt to stay ahead. Here are the top five HR trends you’ll need to watch closely in 2025: 1. AI is Changing the Hiring Game Artificial intelligence is no longer just a buzzword in HR—it’s a game-changer. Tools that can scan resumes, match candidates to roles, and even conduct initial assessments are becoming staples for businesses aiming to save time and improve hiring outcomes. In 2024, many organizations began integrating AI to remove unconscious bias and make their hiring practices more inclusive, and this trend is expected to accelerate. 2. Flexibility Isn’t Just a Perk Anymore Hybrid and remote work models are here to stay, but the conversation has shifted. In 2025, it’s less about offering flexibility and more about making it work effectively. Companies are adopting sophisticated tools for remote collaboration, redefining performance metrics, and ensuring policies address the nuances of managing both in-office and remote teams. The focus is on maintaining productivity without compromising employee well-being. 3. Wellness Goes Beyond Gym Memberships In recent years, wellness programs have evolved beyond basic offerings like gym memberships to address a wider range of employee needs. As companies recognize the link between employee well-being and productivity, they’re broadening their focus to include mental health, financial stability, and holistic support. In 2023 and 2024, for example, Delta expanded its employee wellness initiatives by improving access to mental health care. The airline worked with Spring Health, a new EAP provider, to create a larger and more diverse network of mental health professionals, offering better support for both employees and their household members. Looking ahead to 2025, wellness will become more deeply integrated into company cultures. Expect companies to go beyond providing reactive support to fostering proactive wellness through personalized tools, such as mental health apps, financial coaching, and enhanced benefits like paid leave for caregiving. With these programs, businesses are not just addressing immediate health concerns but also empowering employees to manage their overall well-being in a more holistic way. The focus will be on creating a supportive, sustainable work environment that helps employees thrive both at work and in their personal lives. 4. Upskilling is a Competitive Necessity Technology is evolving faster than ever, and companies are racing to keep up. Upskilling employees in areas like data analysis, AI, and emerging tech became a priority in 2024, and it’s clear that this trend will only grow. Businesses that invest in continuous learning programs—whether through certifications, on-the-job training, or digital learning platforms—are better positioned to stay ahead in their industries. 5. Data is Driving HR Decisions HR is leaning heavily on people analytics to guide decision-making. Instead of relying on intuition, businesses are using data to understand employee engagement, pinpoint reasons for turnover, and improve productivity. The emphasis on metrics like employee sentiment and workforce utilization gained traction last year, and more organizations are embedding analytics into their HR strategies to tackle challenges proactively. Final Thoughts The HR landscape in 2025 will be shaped by these transformative trends. Businesses that embrace innovation and prioritize their people will find themselves not just adapting but thriving in the evolving workplace. As these trends unfold, staying proactive and flexible will be the key to turning challenges into opportunities.

IRS Announces 2025 PCORI Fee Update

January 6, 2025
The IRS has released the 2025 Patient-Centered Outcomes Research Institute (PCORI) fee , which will increase to $3.47 per covered life —a $0.25 increase from 2024. This fee applies to plan years ending on or after October 1, 2024 , and before October 1, 2025 . What is the PCORI Fee? The PCORI fee was introduced as part of the Affordable Care Act (ACA) to help fund the research conducted by the Patient-Centered Outcomes Research Institute (PCORI). This research focuses on improving healthcare outcomes by comparing different medical treatments. The fee is levied on insurers, as well as self-insured and level-funded health plans. The fee is calculated based on the average number of covered lives under a plan and is due once a year, with the filing occurring during the second quarter on Form 720 , the Quarterly Federal Excise Tax Return . The payment is due by July 31 each year. Key Details for Employers and Plan Sponsors Who is Affected? : The fee applies to health insurers, self-insured health plans, and level-funded health plans. When is it Due? : The fee must be reported on Form 720 and paid by July 31 each year. How is it Calculated? : The fee is based on the average number of covered lives during the plan year. The updated $3.47 per covered life fee will be in effect for health plans with policy years ending between October 1, 2024, and October 1, 2025. Employers should be prepared to account for this increase when filing for 2025. For more information on the PCORI fee and its reporting requirements, consult the IRS Bulletin 2024-49 , published on December 2, 2024, or visit the IRS PCORI Fee page . 

Federal DOL Restores Simplified Tip Credit Rule: Employer Guidance

January 6, 2025
In a move welcomed by many employers in the hospitality and service industries, the U.S. Department of Labor (DOL) has officially reinstated the pre-2021 tip credit rule. This change, effective December 17, 2024, follows a recent court of appeals decision that vacated the “80/20/30” tip credit rule that had been implemented under the Trump administration. If you’re wondering what this means for your business, don’t worry—this update doesn’t require any immediate action on your part. What Was the "80/20/30" Rule? Before we dive into the implications of the DOL’s latest rule change, let’s quickly review the "80/20/30" rule. This rule, introduced in 2021, placed specific restrictions on how much time tipped employees (such as waitstaff and bartenders) could spend on non-tip-generating duties (e.g., cleaning, setting up, and other side work). The rule essentially required that tipped workers spend at least 80% of their work hours on tip-generating activities to continue qualifying for the tip credit. Moreover, under the "80/20/30" rule, employers could no longer use the tip credit to offset wages for certain non-tip-producing activities, and they had to ensure that employees spent no more than 30 minutes at a time on side duties. This increased the burden on employers, as it required more careful tracking of employee duties and work hours to remain in compliance. Why Was the Rule Vacated? The court of appeals decision in August 2024 ruled that the "80/20/30" rule was too restrictive and inconsistent with the intent of the Fair Labor Standards Act (FLSA), which allows employers to take a tip credit for workers who perform both tipped and non-tipped duties. The court found that the new rule created unreasonable administrative burdens and restrictions that were not in line with past practices or legal precedents. In response to this ruling, the DOL moved quickly to restore the pre-2021 tip credit rule. What Does the Reinstatement of the Pre-2021 Rule Mean for Employers? With the reinstatement of the pre-2021 tip credit rule, the DOL has effectively simplified the way employers can apply the tip credit to their workers. Under the prior rule, employees who perform a combination of tipped and non-tipped duties can still qualify for the tip credit, as long as their primary job responsibility is related to tipped work. Employers no longer have to track the precise breakdown of time spent on tip-generating vs. non-tip-generating activities in the same way. This returns to the more flexible guidelines where as long as tipped employees perform "related" duties (e.g., cleaning their station, setting up for service), they can still receive the tip credit for those hours, provided those activities don’t dominate their workday. What Action Is Needed from Employers? For most employers, this change will not require any immediate action, as the final rule effectively restores the pre-2021 approach. The main thing to note is that employers should continue to comply with the broader requirements of the Fair Labor Standards Act (FLSA) and ensure they are properly paying employees at least the federal minimum wage (including tips) when they apply the tip credit. Here are a few things to keep in mind: Reassess Timekeeping Systems: While the rule change simplifies some aspects of record-keeping, employers still need to ensure they have a timekeeping system in place that accurately tracks the hours worked by tipped employees. It is essential to ensure that the wages (base pay plus tips) equal at least the federal minimum wage. No Need for Immediate Adjustments: If you were already applying the pre-2021 tip credit rule, no changes are necessary on your part. For those who had adjusted to the "80/20/30" rule, reverting back to the previous method should not require significant changes. State and Local Laws: Employers should still be mindful of any state or local laws that may have stricter requirements than federal law. Always check your state’s labor regulations to ensure full compliance. Why Is This Change Important? The reinstatement of the simplified tip credit rule provides relief to many employers, particularly in industries like restaurants, hotels, and other service-based businesses where tipping is common. The pre-2021 rule is seen as more employer-friendly, offering more flexibility in how tipped employees can spend their time without losing eligibility for the tip credit. For employers, this means less administrative burden, reduced risk of compliance issues, and potentially fewer legal challenges. This shift is a step toward simplifying labor law compliance for businesses already struggling with the complexities of wage and hour rules. Looking Ahead As we move further into 2025, it’s important for employers to stay informed of any future changes in federal labor regulations. While this change restores a previous rule, the DOL’s stance on tip credits and wage issues can continue to evolve. Employers in tip-dependent industries should continue to monitor updates from the Department of Labor and legal rulings to ensure ongoing compliance. The DOL’s restoration of the pre-2021 tip credit rule is a welcome change for many businesses, offering a return to simpler guidelines and less restrictive requirements. For most employers, no immediate action is required, but it’s always a good idea to review your practices to ensure they align with the updated rule. If you need further assistance in navigating these changes, reach out to Simco to ensure your business stays compliant in 2025 and beyond. 

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