June 30 is the constitutional deadline for the passage of a balanced state budget. With that deadline only days away, it is our understanding that last minute budget negotiations have included discussions about the potential elimination of IRMAA reimbursement for education retirees who are 65 or older and are receiving free or cost-shared health benefits in retirement. IRMAA or Income-Related Monthly Adjustment Amount (IRMAA) is a current benefit paid for by the State for education retirees.
Currently, certain education retirees who are enrolled in Medicare have the annual option of filing for IRMAA reimbursement which covers the excess amount, above the annual Medicare premium cost, that some individuals pay based upon their income levels. Every November, retirees enrolled in Medicare are informed of the base Medicare premium amount that they will be billed for in the next year (starting in January). The Medicare premium is determined by the modified adjusted gross income (MAGI) from the preceding tax year. Medicare enrolled are billed for at least the base Medicare premium amount, but in some cases, income level puts retirees in a category where they pay more than the base amount (IRMAA).
In our state, all education retirees who qualify for free or cost-shared health benefits and who are enrolled in Medicare, will receive reimbursement for the base Medicare premium level in their monthly pension check for the retiree and/or their spouse. There is no proposal to change this. However, if their monthly Medicare payment includes IRMAA payments, they can apply for reimbursement for the additional premium amount (IRMAA amount) during the time period from March through May of the following year.
This annual IRMAA reimbursement option is what is at risk in current budget negotiations. In addition to budget language, Senate bill S-4657 has been introduced that would formally eliminate reimbursements of this nature. If passed, the law would prohibit income-related reimbursements for this and all budget years going forward.
Action Needed:
NJPSA is actively engaged on this issue, but we need your help. As time is of the essence, if you and your family will be potentially impacted by this change, we urge you to contact your legislator and legislative leadership to express your opposition to the elimination of IRMAA reimbursement. Here is what you can do today:
1. Call Governor Phil Murphy, Assemblyman Craig Coughlin, the Speaker of the Assembly, and Senator Nick Scutari, Senate President – these are the decision-makers with final say on what language is put in the budget and what is voted on. Their contact information is at the top of the attached list.
- Call today and identify yourself as a constituent, and explain what the loss of IRMAA reimbursement will mean to you and your family. With retirees no longer receiving a cost-of-living adjustment (COLA) this reimbursement income may be particularly critical to your household, particularly as it relates to health benefits.
- Ask them not to include any budget language that would affect your ability to afford health coverage and to remove S4657 from consideration by the Legislature.
2. Additionally, call your local legislators who will have to vote on your behalf. Here is how:
- Identify your local legislators from the attached list. We have included a list of legislators and municipalities they represent to assist you, including their contact information.
- Call your local legislators today, identify yourself as a constituent, and explain what the loss of IRMAA reimbursement will mean to you and your family. With retirees no longer receiving a cost-of-living adjustment (COLA) this reimbursement income may be particularly critical to your household.
Ask your legislators to oppose S4657 and any budget language that would affect your ability to afford health coverage.
3. Contact NJPSA if you have any questions at (609) 860-1200 and ask for Michael Vinella, Director of Membership and Retirement Services, or any member of our Government Relations Department.
NJPSA will keep you advised of any developments on this issue. Thank you for your efforts!