How the Hold Harmless Rule Protects Social Security
Medicare Part B is the part of Medicare insurance that covers medically necessary services and/or supplies. Most Social Security recipients pay for Medicare Part B through automatic deductions from their monthly benefits. Under a provision known as the “hold harmless rule”, most Social Security recipients do not have to worry about seeing their benefits reduced when monthly Medicare Part B premiums increase.
How Does Hold Harmless Rule Work?
Social Security recipients usually receive a cost-of-living adjustment (COLA) to their monthly benefit to keep up with inflation, which typically increases their monthly benefit. However, if consumer prices drop in a particular year, the COLA is lower or no there is no COLA that year. If a COLA cannot not keep up with rising Medicare Part B costs, Social Security benefits would be reduced to pay for the increase in Medicare premiums. This would not happen under the “hold harmless rule”, but whether or not the rule comes into play does depend on the amount of the COLA and the Medicare Part B premium increase.
For example, the COLA was 1.7 percent in 2015, 1.5 percent in 2014, 1.7 percent in 2013 and 3.6 percent in 2012. However, there was no COLA in 2016, 2011 and 2010, so the “hold harmless rule” would not have been a factor in these years. Likewise, in 2014 there was no increase in Medicare premiums, so the 1.5 COLA Social Security recipients received that year would not be affected.
Who is Protected?
According to Medicare Interactive.org, the “hold harmless rule” protects Social Security recipients who fall under the following groups:
- Those entitled to benefits for November and December of 2015
- Those whose Medicare Part B premiums was or will be deducted from their Social Security benefits in November 2015 through January 2016
- Those who did not receive enough of a COLA to pay the increased Medicare premium.
- Those who do not already pay higher Part B premiums because they were eligible for an Income-Related Monthly Adjustment Amount (IRMAA)
The hold harmless provision does not provide protection for Social Security recipients who are:
- New to Medicare
- Subject to IRMAA
- Enrolled in a Medicare Savings Program (MSP) or were enrolled in 2015 but no longer qualifies due to an increase in income or failure to recertify.
In addition, if you paid a Part B late enrollment penalty, the “hold harmless rule” will not waive this penalty for you—and it may even increase–even if you qualify for protection under the rule. This is because the penalty may will be calculated based on the new higher premium
Are You Protected?
If you’re concerned about how the “hold harmless rule” might impact your Social Security benefits, you can contact the Social Security Administration or consult with an experienced Social Security attorney. One of our seasoned attorneys will be happy to sit down with you to discuss how the rule may or may not affect your Social Security benefits. Call us today to schedule your free consultation.