TN 7 (04-13)

A. Description of life changing events

There will be cases when a beneficiary or the spouse of a beneficiary experiences one or more of the life changing events (LCE) listed in HI 01120.005C in this section, causing a significant reduction in modified adjusted gross income (MAGI). A “significant” reduction in MAGI is a reduction that decreases or eliminates the income-related monthly adjustment amount (IRMAA) for a specific tax year. A beneficiary who has experienced an LCE causing a significant reduction in MAGI may request us to make a new initial determination using a more recent tax year, than the tax year used previously to impose IRMAA.

When a beneficiary states the LCE caused the significant reduction in income, process the request for a new initial determination based on the beneficiary's statement. As part of processing the request for a new initial determination, the beneficiary must attest under penalty of perjury that all statements made are true and correct. If the beneficiary attests under penalty of perjury that the LCE caused the significant reduction in income, we accept that statement. We do not develop the types of income that make up the MAGI, just that the MAGI decreased and that the LCE occurred prior to the decrease in MAGI, regardless of how far in the past the LCE occurred.

NOTE: A report of an LCE with a significant reduction in MAGI applies only to the beneficiary reporting. If a beneficiary reports an LCE with a significant reduction in MAGI that could affect a spouse or ex-spouse, we do not extend its findings to the nonreporting spouse. If the LCE affects the nonreporting spouse, it is his or her responsibility to contact us.

If the beneficiary has not filed a tax return for the current premium year, the beneficiary must provide us with an estimate for the more recent tax year. The beneficiary also has the option to give a second tax year estimate for the next premium year if the LCE also affects it. If he or she gives an estimate for the current premium year, but not for the next premium year, use the current year estimate for the next premium year.

EXAMPLE: If a beneficiary provides an estimate for tax year 2007 for premium year 2007, he or she can also provide an estimate for premium year 2008. If he or she gives no estimate for premium year 2008, you must input the 2007 tax year estimate for 2008. You must make two separate premium year inputs for all LCE's (with the exception of non-qualifying life-changing events (NQE)).

NOTE: Beneficiaries may use the optional Form SSA-44 (Medicare Income-Related Monthly Adjustment Amount – Life-Changing Event) to report a life-changing event with a significant reduction in income. If you receive an SSA-44 without a second tax year estimate, contact the beneficiary to request a second year estimate. Inform the beneficiary that if there is no second year estimate, we use the first year estimate for the next year as well.

B. When a beneficiary can request a new initial determination based on an LCE and when the decision is effective

Based on the following conditions, a beneficiary can request a new initial determination after an LCE, when the decision is effective.

1. A beneficiary may request a new initial determination any time after an LCE and a significant reduction in MAGI has occurred. The LCE may have occurred at any time in the past.

2. Ordinarily, we do not make a determination retroactive to a prior premium year on a new initial determination, unless the LCE causing the reduction occurs in the last three calendar months of the immediately prior premium year and we receive the request for a new initial determination for the preceding premium year by March 31, of the current premium year.

   EXCEPTION: We accept a late request, if there is good cause for late filing, as explained in GN 03101.020.

3. The new initial determination is effective the year the LCE occurred or any year after. The effective year of the new initial determination cannot be before the LCE has occurred.

4. If Part B enrollment was effective for the entire year that the beneficiary made the request, the effective date of the new initial determination is January of that year. If the beneficiary did not have Part B entitlement for the entire year, the effective date is the first month of Part B entitlement in that year.

For IRMAA for prescription drug coverage (IRMAA-D), if enrollment in a prescription drug plan was effective for the entire year that the beneficiary made the request, the effective date of the new initial determination is January of that year. If the beneficiary did not have prescription drug coverage for the entire year, the effective date is the prescription drug coverage start date that year.

NOTE: If a beneficiary has Medicare Part B or Medicare prescription drug coverage only, enrolls in the other program later in the same premium year, and we made a new initial determination, e automatically apply it to the subsequent enrollment.

5. The effective date of a beneficiary's request to use a more recent tax year because of an LCE depends on the following three factors:

   • when the LCE affected the beneficiary's MAGI or tax filing status or both; and

   • when the beneficiary made the request; and

   • when the LCE occurred.

The following chart shows when the use of a most recent tax year is effective.

C. List of life changing events

A Life-Changing Event (LCE) can be one or more of the following eight events:

1. Death of spouse (HI 01120.010);

2. Marriage (HI 01120.015);

3. Divorce or annulment (HI 01120.020);

4. Work reduction (HI 01120.025;)

5. Work stoppage (HI 01120.030);

6. Loss of income-producing property (HI 01120.035);

7. Loss of employer pension (HI 01120.040); or

8. Receipt of settlement payment from a current or former employer (HI 01120.043).

D. Examples of non-qualifying life-changing events

Our list of LCEs for IRMAA purposes is exclusive. Beneficiaries may experience losses of MAGI or income that are not LCEs. Some examples of events and reductions in MAGI or income that are not LCEs are:

• Ordinary loss of dividend income;

• Higher medical expenses;

• Higher living expenses;

• Loss of child support;

• Loss of alimony; or

• Voluntary sale of income-producing property.

NOTE: Loss of dividend income due to criminal theft could qualify for an LCE, as explained in HI 01120.035.

There are situations where a beneficiary may request the use of a more recent tax year for a new initial determination because a one-time event caused an increase in his or her income for the tax year we are using to impose IRMAA. Consider this type of event as a non-qualifying event. Some examples of one-time income that cause an increase and are non-qualifying events (NQEs) include:

• Capital gains from the sale of property;

• Lottery winnings;

• Casino winnings;

• Conversion of an IRA; or

• Cashing bonds.

E. Procedure for handling a report of a non-qualifying LCE