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it is unusual that the employer did not withhold Medicare tax - I've heard of employers not withholding Social Security (typically state and local governments that have a pension plan) - but most of those government entities still will withhold for Medicare.
OP said he was in police force working for the State which does not withhold SS.
One situation I can think of employer not withholding SS and mEDICARE is when the employee is not really an employee but an independent contract worker.
Most retirees do not receive any subsidy for their retiree medical insurance.
You raised a good point. Many government retiree health plans may also include a hefty subsidy attached to their retirement package that is used to offset health care cost. I know some can pick a government provided Medicare Advantage plan or they can opt out and go on their own and pick Medicare and a supplement. They get an annual draw account that they submit premium expense and get reimbursed a fair amount. And as you mentioned since they saved $ throughout their employment by not paying into the system, playing catchup probably is much less overall.
This OP should not be in the trick bag of now being told, on the eve of retirement, that despite promises throughout his career to the contrary, he is required to buy into Medicare to access employer retiree health insurance. Had he known from the beginning his retiree health benefits would require Medicare, some way, somehow, over his working years, he would have acquired the necessary earnings credits - even if it meant working part-time somewhere. His current situation is outrageous.
Thinking this through, I am also realizing that his employer by setting up an Advantage plan, will be paid by CMS the usual capitation rate of $1k/mo. for each enrollee. So, this is a big win for that employer. Not only do they eliminate their promised retiree health expenses, they will be virtually fully-funding via the government (and their retirees' buy-in premiums) their 'promised' retiree program. MA's have lots of options of increasing their revenue should the plan expenses exceed the capitation - actually the MA's often abuse this privilege.
I would like to know the background of how this decision was made.
This OP should not be in the trick bag of now being told, on the eve of retirement, that despite promises throughout his career to the contrary, he is required to buy into Medicare to access employer retiree health insurance.
I think the OP is Already retired. They were on a non-Medicare retiree health plan and because they are becoming Medicare eligible, they are being required to switch to Medicare as part of their continued retiree health plan.
One of the issues public sector employee's that retire faces is that retirement eligibility rules can mean a person as young as 38 may be able to retire with their lifetime health insurance. So, lifetime health insurance doesn't always mean the same plan, just guaranteed subsidized insurance will always be available.
I know people in government public safety sectors that if not for their guaranteed retiree health insurance, they would have been highly rated or declined for health insurance prior to the ACA. Their contracts always had a Medicare enrollment requirement, just they never bother to read that far into the future.
It sounds like the employer SHOULD deduct medicare from his paycheck all along/
OP is retired and soon be 65,so now he has to come up with $499 each month out of his own pocket
It sounds like the employer SHOULD deduct medicare from his paycheck all along/
OP is retired and soon be 65,so now he has to come up with $499 each month out of his own pocket
Public sector employees hired before 1986 did not pay Medicare taxes. Employees hired after 1986 paid taxes. So, at the minimum, those employees knew for over 35 years they would not be covered like those who paid into Medicare all along. I'm not getting why this is considered being sprung on them. It's been out there if they just cared to check way beforehand.
OP said he was in police force working for the State which does not withhold SS.
One situation I can think of employer not withholding SS and mEDICARE is when the employee is not really an employee but an independent contract worker.
If someone is an independent contractor, they pay self employment taxes which pays into SS and Medicare.
OP said he was in police force working for the State which does not withhold SS.
One situation I can think of employer not withholding SS and mEDICARE is when the employee is not really an employee but an independent contract worker.
Like I said, it is common for state and local govts (which includes police and fire) to not pay into SS - it is not common for them not to pay into Medicare.
Public sector employees hired before 1986 did not pay Medicare taxes. Employees hired after 1986 paid taxes. So, at the minimum, those employees knew for over 35 yearsthey would not be covered like those who paid into Medicare all along.
I'm not getting why this is considered being sprung on them. It's been out there if they just cared to check way beforehand.
Yes, this Medicare eligibility IS being sprung in them after working their entire lives - and then retiring - never in a million years expecting they would EVER need it after a lifetime of promises otherwise. Why would they? Were they forewarned by employer they were vulnerable if the employer ever decided to back out of the deal? It's a doublecross, plain and simple.
Many municipalities did not participate any part of FICA - saying they will cover retiree health. And, now, BAM. Here we are. The guy can't do anything about it now except get a job somewhere and get the quarters necessary to eventually get out from under $499/mo. My uncle did just that at age 60, retired city worker, no SS/Medicare eligibility - got a part-time job just to eventually qualify for SS benefits to supplement his pension - health insurance wasn't the issue b/c way back then, his was covered by his union.
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