Do you qualify for a subsidy and a deduction?
- If you qualify for both a subsidy and a deduction, they form a circular relationship. The IRS prescribed a method to calculate the split between the subsidy and the deduction. It’s difficult to calculate by hand but tax software will take care of it for most people.
What is a subsidy on pay stub?
A subsidy is an employer paid benefit, whereas, a pre-tax deduction is an employee paid payroll deduction. A subsidy saves the employer on payroll taxes and the employee on having to pay additional taxes on a higher income.
What does subsidy amount mean?
A subsidy is a direct or indirect payment to individuals or firms, usually in the form of a cash payment from the government or a targeted tax cut. In economic theory, subsidies can be used to offset market failures and externalities to achieve greater economic efficiency.
Do you have to pay back a subsidy?
For 2020, excess subsidies do not have to be repaid. And for 2021 and 2022 only, the ARP allows people with income above 400% of the poverty level to qualify for premium subsidies.
Does subsidy count as income?
No. The subsidies (both premium assistance tax credits and cost-sharing) are not considered income and are not taxed. Read more: How the American Rescue Plan has boosted premium subsidies and made health coverage more affordable. Either way, the subsidy is a tax credit, and is not considered income.
Is employee subsidy taxable?
For most businesses, a Covid-19 Wage Subsidy payment is classified as ” excluded income” for income tax purposes. This means that a business receiving the payment does not pay income tax on it. The business will not get an income tax deduction for the wages they have paid using the Covid-19 Wage Subsidy.
How does wage subsidy work for employers?
As previously announced, the Subsidy will cover up to 75% of an employee’s wages. The 75% amount will be of the first $58,700 of an employee’s income, resulting in a maximum payment per employee of $847 per week. The Subsidy will be paid for up to 3 months and is backdated to March 15, 2020.
Are subsidies good or bad?
Since subsidies result in lower revenues for producers of foreign countries, they are a source of tension between the United States, Europe and poorer developing countries. While subsidies may provide immediate benefits to an industry, in the long-run they may prove to have unethical, negative effects.
What are subsidies examples?
Examples of Subsidies. Subsidies are a payment from government to private entities, usually to ensure firms stay in business and protect jobs. Examples include agriculture, electric cars, green energy, oil and gas, green energy, transport, and welfare payments.
Why does government give subsidies?
Basically, subsidies are provided by the government to specific industries with the aim of keeping the prices of products and services low for people to be able to afford them and also to encourage production and consumption.
How much subsidy will I have to pay back?
If annual income is at least 300% but less than • 400% FPL, repayment is capped at $2,500 ($1,250 for individuals). If the final annual family income is 400% FPL or • greater, the subsidy must be repaid in full.
How do I claim my wage subsidy?
Employers must apply for and approve a wage subsidy agreement within 12 weeks (84 days) of your new employee’s start date to be eligible. Search now to find your local provider or call the Employer Hotline on 13 17 15. Call charges apply for calls to ’13’ numbers from mobile phones.
How can I avoid paying the premium tax credit?
The easiest way to avoid having to repay a credit is to update the marketplace when you have any life changes. Life changes influence your estimated household income, your family size, and your credit amount. So, the sooner you can update the marketplace, the better. This ensures you receive the correct amount.
Does Social Security count as income for Mnsure?
Social Security benefits are Title II Income. Title II Social Security benefits include retirement, disability, and Railroad Retirement benefits. Supplemental Security Income (SSI) is not Title II income.
Do you have to pay back health care tax credit?
When you apply for coverage in the Health Insurance Marketplace®, you estimate your expected income for the year. If at the end of the year you’ve taken more premium tax credit in advance than you’re due based on your final income, you’ll have to pay back the excess when you file your federal tax return.
How can I lower my AGI 2021?
Reduce Your AGI Income & Taxable Income Savings
- Contribute to a Health Savings Account.
- Bundle Medical Expenses.
- Sell Assets to Capitalize on the Capital Loss Deduction.
- Make Charitable Contributions.
- Make Education Savings Plan Contributions for State-Level Deductions.
- Prepay Your Mortgage Interest and/or Property Taxes.
Limited Income and Resources
Individuals with Medicare who qualify for the Low Income Subsidy (LIS) receive assistance in paying for prescription medications, and the costs of Medicare prescription drug coverage are reduced.
How can I help people get the LIS?
We collaborate with our partners to identify and enroll individuals who may be eligible for the LIS, and we urge local groups to inform members of their communities about the program.
Who might need help with their LIS?
There are four types of persons who already have the LIS, but who may want some assistance in maintaining it or understanding that their LIS is evolving. When there are updates to their LIS, we send them customized alerts printed on colored paper to inform them of the changes. In September, we mail anotice (CMS Publication No. 11198) (PDF) on gray paper to those who will no longer be automatically eligible for the LIS, informing them that they would no longer be automatically eligible for the LIS.
These individuals may still be eligible for the LIS program, but they will be need to submit a new application.
- Informs the individual as to why they are no longer automatically eligible for the LIS. Encourages them to complete and submit an application to the LIS program
2. Individuals who will see a reduction in their LIS co-payment During the first week of October, we mail anotice (CMS Publication No. 11199) (PDF) on orange paper to those who will be eligible for further assistance but will have a change in their co-payment. 3. Individuals who will be transferred to a new plan Beginning in early November, we will mail a notification on blue paper (CMS Publication No. 11208) (PDF) to individuals who are eligible for the LIS but will be switched to a different prescription drug plan beginning on January 1st, 2018.
- Meet the requirements to get the full (100 percent) premium subsidy
- Are enrolled in a prescription medication plan where the premium is being raised over the low-income premium amount
- CMS automatically enrolled them in their existing plan
LIS participants will also be reassigned automatically if their prescription drug plan departs the Medicare Program, providing they meet the eligibility requirements. 4. Individuals who made a decision on their plan We mail a notification (CMS Publication No. 11267) (PDF) to the following persons in early November:
- Affected individuals’ premium costs will rise, but they won’t be automatically transferred to a new plan because they picked and enrolled in their current plan. People who are eligible to get the full (100 percent) premium subsidy, but who are in a plan that is raising their premium amount to the point where it is greater than the typical low-income premium subsidy level
This letter informs consumers about the rise in the cost of their prescription drug plan premiums and discusses their options for remaining in their current plan or switching to another plan (including plans for which they will not be required to pay a monthly premium).
Where can I learn more about the LIS?
- Notices and mailings from the LIS
- Consumer mailings (in PDF format)
- Partners can benefit from the following information: Reassignment (PDF)
- Medicare Limited Income NET Program
- LIS Resource Limits Memo (PDF)
- And more. What to Do If You Are No Longer Employed Fact Sheet Automatically qualify for additional assistance (this link will open in a new window)
- Apply online for further assistance and receive more information from the Social Security Administration (which opens in a separate window)
Am I eligible for a health insurance subsidy?
Everyone is required to obtain health insurance under the Affordable Care Act, with a few exceptions. You are covered if you have health insurance via your employment or are qualified for government programs such as Medicare or Medicaid. If you don’t have health insurance, you’ll have to get it on your own. If you don’t, you’ll be subject to a penalty. Do you already cover the cost of your own health insurance? Do you want to go shopping for the first time? In any case, the good news is that you may be eligible for financial assistance in the form of individual health insurance.
What’s a subsidy?
A subsidy is a form of financial aid that is used to assist you in paying for something.
It is not a loan, and you are not required to repay it. Individual health insurance plans are eligible for two types of federal subsidies, both of which are provided by the federal government.
- It is possible to decrease your monthly health insurance payment, or premium, with the Advanced Premium Tax Credit. The Cost Sharing Reduction program lowers the amount of money you have to pay out of pocket for health care services you get during a policy period (typically a year). It contains your deductible, coinsurance, and copays, all of which add up to your out-of-pocket limit
- It also includes your copayments.
When you purchase your health insurance plan, you will be required to complete an application for a subsidy.
Can I get a subsidy?
It is dependent on the following factors:
- What your income looks like in relation to the Federal Poverty Level
- The number of people in your family
- What your health insurance premiums are where you reside
Your money is the most important element. If your household income is up to four times the Federal Poverty Level, you may be eligible for a subsidy. That equates to around $47,000 for an individual and $97,000 for a household of four people. If you’re an individual with a household income of around $29,000 or less, or a family of four with a household income of approximately $60,000 or less, you may be eligible for both subsidies. It is your responsibility to record any subsidies received when you file your tax returns.
When you’re searching for insurance, you may check to see whether you qualify for cheaper premiums or discounts.
Extra Help program: Medicare’s Part D Low-Income Subsidy
a succinct response Assistance in a Specialized Area Extra Help, also known as the Low-Income Subsidy (LIS), is a federal program administered by Social Security that assists people with Medicare who have low incomes and assets to pay for their Medicare prescription drug coverage (Part D), which includes coinsurance, deductibles, and premiums. Extra Help is a federal program administered by Social Security that assists people with Medicare who have low incomes and assets to pay for their Medicare prescription drug coverage (Part D), which includes coinsurance, deductibles, and premiums Extra Help is available in a number of different levels.
You can either receive health coverage directly from the federal government (see: Original Medicare) or through a private company that administers your health coverage (see: Medicare Advantage Plan) “An example of a prescription drug is one that can only be obtained through the use of a prescription issued by a health-care professional or provider.
Part D of Medicare, generally known as the Medicare prescription drug benefit, is the section of the program that provides coverage for prescription drugs.
You can enroll in a Medicare Part D plan through a stand-alone prescription drug plan (PDP) or a Medicare Advantage Prescription Drug Plan (MAPD), which is a Medicare private health plan (Part C) that includes prescription drug coverage for Medicare beneficiaries.
People who enroll in Part D are required to pay an additional monthly premium on top of their Part B cost.
See also: Private Plan Card for further information. “>Low-Income Subsidy (LIS)”>Low-Income Subsidy (LIS)”>Low-Income Subsidy (LIS)”>Low-Income Subsidy (LIS)”>Low-Income Subsidy (LIS)”>Low-Income Subsidy (LIS)”> (LIS). Eligibility for Extra Assistance
- Extra Help may be available to you if your monthly income is up to $1,719 in 2022 ($2,309 for couples) and yourAssetsAssets are resources such as savings and checking accounts, stocks and bonds, mutual funds, retirement accounts, and real estate”>assetsare below specified limits, such as those in a savings and checking account (see theExtra Help income and asset limit chartfor details). Among these restrictions is a $20 income disregard that theSocial Security Administration (SSA)The Social Security Administration is the United States government agency responsible for advancing the economic security of Americans through shaping and administering various programs, including Medicare, Social Security Disability Insurance (SSDI), Supplemental Security Income (SSI), and Extra Help. It is money that comes from sources other than your present job that is referred to as “unearned income.” Includes Social Security benefits, Veterans benefits, pensions, annuities, and other regular payments you get, such as alimony and workers’ compensation. “>unearned income is money that you receive without working for it (e.g., retirement income). Even if your income or assets exceed the qualifying criteria, you may still be eligible for Extra Help because certain types of income and assets, in addition to the $20 stated above, may not be considered against your eligibility
- “Medicaid is a state-run program that covers medical expenses for people with low or limited incomes. “>Medicaid, Supplemental Security Income (SSI), or a Medicare Savings Program (MSP), you are automatically eligible for Extra Help, regardless of whether you meet the program’s eligibility requirements. An orange-colored notification from the Centers for Medicare and Medicaid Services should arrive in the mail (CMS) Previously known as the Health Care Financing Administration (HCFA), the Centers for Medicare and Medicaid Services is the United States government agency responsible for administering Medicare, Medicaid, SCHIP (State Children’s Health Insurance Program), HIPPA (Health Insurance Portability and Accountability Act), CLIA (Clinical Laboratory Improvement Amendments), and a number of other health-related programs in the United States. “>A letter from the Centers for Medicare and Medicaid Services (CMS) telling you that you do not need to apply for further assistance
Advantages of Extra Assistance There are several advantages to participating in the Extra Help program (also known as the Part D Low-Income Subsidy):
- It compensates you for your Part DPremium. A premium is the amount of money that a person must pay to Medicare or another health insurance plan in order to be covered by the plan. Premiums are often paid on a monthly basis.”>premium up to a benchmark amount determined by each state
- Reduces the cost of your prescription medications. Special enrollment periods (SEP) are available once every calendar quarter throughout the first nine months of the year, allowing you to enroll in a Part D plan or transfer between plans without penalty. (You are unable to utilize the Extra Help SEP during the fourth calendar quarter of the calendar year) (October through December). Prescription changes should be made duringFall Open Enrollment, which is currently taking place. Prescription drug coverage changes
- Eliminates any Part D late enrollment penaltyyou may have accrued if you delayed Part DEnrollmentEnrollment is the process of enrolling in Original Medicare, a Medicare Advantage Plan, or a Medicare private drug plan (Part D).”>prescriptiondrug coverage changes
Depending on your income and assets, you may be eligible for either full or partial Extra Help, depending on your situation. Both programs offer financial aid to help you pay for your medications. In order to qualify for such help, your drugs must be included on your plan’s formulary. Formulary This is the list of prescription pharmaceuticals for which a Medicare Advantage Plan that provides drug coverage—Medicare Advantage Prescription Drug Plan (MAPD)—or a Medicare private drug plan (Part D) will contribute to the cost.
You should include pharmacies in your plan’s formulary, and you should make advantage of them.
In most cases, managed care plan members can only obtain covered treatments from providers who are part of the plan’s network of providers.
It’s important to remember that Extra Help is neither a substitute for Part D or a strategy in and of itself: You must continue to have a Medicare Part D plan in order to get Medicare prescription medication coverage and Extra Help support from the government.
Making the decision to use Extra Help when you already have other kinds of prescription medication coverage For those who are eligible for Extra Help but already have other creditable prescription drug coverage, you should carefully consider the costs and coverage of Part D and Extra Help before deciding whether or not to enroll in Part D and Extra Help or to continue with your current prescription drug coverage.
It’s important to check with your previous employer or union to see whether you may enroll in a Part D plan without losing the retiree benefits you wish to preserve.
In the event that you are unable to maintain both Part D and your retiree benefits, or if maintaining both is no longer cost-effective, carefully consider whether you should enroll in a Part D plan, particularly if your retiree plan also includes your spouse or dependents.
Coverage that is commendable In the case of pre-existing conditions, creditable coverage is defined as any health insurance coverage you have within 63 days of obtaining a new insurance policy that can be utilized to reduce the waiting time for coverage.
To learn more about how to refuse Part D without losing your Medicaid coverage, contact your local Medicaid office now. For those who are still enrolled in Medicaid or who are qualified for Extra Help, they can enroll in Part D at any time without incurring any additional fees.
Drug costs under Extra Help
If you haveExtra Help, you will be responsible for paying either theExtra Help or the Extra Help Fees throughout the year. Extra Help, also known as the Low-Income Subsidy (LIS), is a federal program administered by Social Security that assists people with Medicare who have low incomes and assets to pay for their Medicare prescription drug coverage (Part D), which includes coinsurance, deductibles, and premiums. Extra Help is a federal program administered by Social Security that assists people with Medicare who have low incomes and assets to pay for their Medicare prescription drug coverage (Part D), which includes coinsurance, deductibles, and premiums Extra Help is available in a number of different levels.
“>Additional AssistanceCopayment A copayment, often known as a copay, is a predetermined amount that you are obliged to pay for each medical service you get (for example, $5 or $35) before you can receive that service “>copayment or the copay for your prescription under your insurance plan A prescription is an order for a health-care service or a medicine that is written by a competent health-care professional for the purpose of providing that service or drug “Prescription drugs are those that are prescribed by a doctor.
- You will always pay the cheaper cost of the two options.
- In the following example, Mr.
- As a result, his Extra Help copays are $3.95 for generics and $9.85 for brand-name medications.
- If Mr.
- If Mr.
- S would be responsible for the Extra Help copay for the whole year.
S would pay a 15 percent surcharge if he received only half Extra Help.
Typically, it is a percentage of the total amount of money that has been granted.
“>coinsurance for his prescription medicines or the normal copay for his health plan.
Those who receive complete Extra Assistance and make it Catastrophic Insurance Protection Insurance that is intended to prevent you against having to pay extremely large out-of-pocket expenses in the future.
Crash insurance is not provided by Medicare Part A and Part B under the original Medicare program.
There is catastrophic coverage available under the Medicare prescription medication program (Part D).
A few of Medicare private plans, such as regional PPOs (Preferred Provider Organizations), may also include catastrophic coverage or restrictions on out-of-pocket payments, albeit these caps may exclude some high-cost procedures from their coverage.
The cost of generic pharmaceuticals will be $3.95 for those who receive partial Extra Help and $9.85 for those who receive brand-name drugs for the balance of the calendar year.
Health Insurance Deductible Subsidy
In collaboration with the Graduate College and Student Life, the Graduate Student Association established the Drexel Aetna Student Health Insurance Deductible Subsidy program in 2021 to assist full-time graduate students in quarter programs who are enrolled in Drexel’s Aetna student health insurance plan to cover their deductible payment. Please read this page thoroughly before applying via the link provided below. Visit the Health Insurance Subsidy website for further information on the health insurance subsidy program, which is designed exclusively for full-time doctorate students enrolled in quarter programs who receive qualifying assistantships or fellowships.
Graduate students who get little or no financial assistance to cover the costs of their education and other living expenses may find that the additional cost of health insurance, particularly the deductible, is a financial burden. The purpose of the subsidy program is to give some relief to qualified graduate students, especially during a time when they are facing significant financial difficulties as a result of the COVID-19 epidemic. The Graduate Student Association, in collaboration with the Biomedical Sciences Graduate Student Association, came together to brainstorm ways to assist graduate students during this difficult time.
For the purpose of applying for the subsidy, Drexel graduate students enrolled full-time (9 credits) in quarter programs, including master’s and doctoral students, and who are presently enrolled in Drexel’s Aetna student health insurance plan are eligible to do so. ** Semester students in the Division of Biomedical Science Programs at the Graduate School of Biomedical Sciences can also apply for the subsidy financed by the BSGSA through a separate application through the Drexel Funding Portal, which is accessible through the Drexel funding portal (InfoReady).
Dependents are not covered under the subsidy.
About the Deductible
The deductible is the amount of money you must pay out-of-pocket for eligible health-care services before your insurance plan begins to pay for those costs. The Drexel Aetna student health insurance plan currently has a $100 in-network deductible for students who are in-network with the insurer.
How to Apply
Students who are eligible must submit a full application, together with all needed and pertinent documentation indicated below, through the Drexel Funding Portal in order to be considered (InfoReady).
In addition, semester students enrolled at the Division of Biomedical Science Programs through the Graduate School of Biomedical Sciences can apply for the BSGSA subsidy through a separate application in the Drexel Funding Portal (InfoReady). Submit a Request for Information
- Required: A fully completed application submitted through the Drexel Funding Portal (InfoReady) before the given date. Required: Your medical information and your Aetna redacted receipt (please send your redacted receipt as a single PDF file with verification of deductible payment and your name) are required. Please conceal any additional personal and medical information, as well as the reason for the visit, ID numbers, and so on. See the sample linked to the InfoReadyapplication for more information. If Applicable, please include the following information: Provide a tuition statement if the applicant pays his or her own tuition, such as one from your DrexelOnestudent account, if the applicant does so (student account balance, student activity by term). See the sample linked to the InfoReadyapplication for more information. The completedCheck Request Form should be submitted to the Graduate College [email protected] (the form is also accessible for download in theInfoReadyapplication)
- If/When Approved:
From July 1 through June 1, students can submit applications for the subsidy on a rolling basis, with applications being processed by the end of the fiscal year (June 30) or until funds are depleted. Members of the Graduate Student Association’s Executive Board, a faculty adviser, and members of the Graduate College staff will assess each application for completeness and eligibility based on the criteria given above before recommending whether or not the applicant should be admitted. The amount of the subsidy will be decided by the need (as defined by a rubric) and the availability of cash.
Applicants may learn more about the committee by visiting their website.
For Approved Subsidy Recipients ONLY: Reimbursement Process
To begin, complete the Check Request Form by following the steps outlined below: Section 1: Payee Identification Information
- Fill in the payee’s name and full mailing address exactly as it will appear on the check, including any special instructions. A permanent residential address is necessary for payments to individuals
- However, payments to businesses are not required. Ensure that the original invoice or other supporting paperwork that substantiates the payment is attached for audit purposes. Employees and students who wish to be reimbursed must submit their University identification number (8 digits). Do not include your Social Security Number (SSN)
- If the payee is a person, include the recipient’s citizenship status as well as whether or not the payee is an employee of Drexel University in the payment. Inquiries about payments to non-resident aliens should be directed to the Drexel University Tax Department, which may be reached at [email protected] or (215) 895-6880.
Section 2: Justification and Delivery of Services
- The rationale for the spending (for example, “Reimbursement for Student Health Insurance Deductible”) should be included. Checks will be mailed directly to payees in order to ensure that payments are made on time. The default distribution method is “US Mail,” with direct deposit as an option if appropriate. When submitting a Request to Mail with Enclosures, you must include the original papers that will be addressed to the payee as well as copies of the documents for audit reasons. Pick-ups are only available for emergencies and must be scheduled in advance.
Approvals of funding sources are covered in Section 34. Please do not fill in the blanks in these areas. They are only to be used for official purposes.
Then, within two weeks of receiving news that your subsidy has been received or approved, provide the following documentation to the Graduate College through email at [email protected]:
- Completion of the Check Request Forms as indicated above Documentation proving receipt and approval of the subsidy (you can share your email notification)
- A copy of the Aetna Medical Information-Redacted Receipt (which you supplied with your original application)
- A copy of your information-redacted bank statement for the exact credit or debit card used to cover the deductible is also required. Remove all personal information, account numbers, totals and balances, and all other line items, balances, and other information from the document, with the exception of your complete name and the deductible line item with the date of processing.
[email protected] If you have any questions or concerns, please do not hesitate to contact the Graduate College at the address above.
Medicare Extra Help for Low Income Persons
Individuals who have Part D prescription drug coverage who are on a fixed income may be eligible for financial assistance to cover the expenses of deductibles and co-pays, if they qualify. This additional assistance is sometimes referred to as the Low Income Subsidy (or LIS). Who is eligible to participate? Individuals who qualify for Extra Help must be qualified forMedicare Part D and have incomes that are less than 100 percent of the Federal Poverty Level for a full benefit or less than 150 percent of the Poverty Level for a partial benefit in order to get the assistance.
- Benefits are determined by the recipient’s income as well as his or her living condition.
- As well as the yearly deductible amount ($480 in 2022), it will cover the $99 deductible that partial subsidy applicants will be responsible for paying.
- Individuals will pay $3.95 for a generic or multi-source medicine and $9.85 for all other prescription prescriptions under the program.
- Individuals who are not eligible for Extra Help will continue to pay co-payments ranging from $3.95 for generic or multisource drugs with a retail price less than $79 to 5 percent for those with a retail price greater than $79.
Beneficiaries would pay $9.85 for brand-name pharmaceuticals with a retail price less than $197 and 5 percent for those with a retail price greater than $197 for brand-name drugs under consideration. Getting additional assistance with your Part D might be beneficial.
- Reduce or eliminate your out-of-pocket expenditures for prescription drugs
- Eliminate your monthly Part D premiums
- Reduce or eliminate your yearly Part D deductibles
- Reduce or remove your annual Part D copayments Remove the coverage gap, often known as the donut hole, from your insurance plan. This implies that your medicines will not be more expensive simply because you exceeded a spending restriction in a specific year
Extra Help is expected to save recipients an average of $5000 in prescription medication expenditures each year, according to estimates. The following are some examples of fluctuating benefits:
|Beneficiaries Eligible||Maximum Income(2021 Federal Poverty Levels)||Maximum Resources(2021)||Benefits (Deductibles, Co-pays, Out of pocket)|
|Institutionalized for more than 30 days in an assisted living, nursing home or hospital and receivingMedicaid.||Deductibles and Co-pays$0.00|
|Non-institutionalized Income ≤ 100% Poverty||$1,094/single $1,472/couple||$9,470/single $14,960/couple||Deductible- $0Premium in excess of $35.02 Generics- $1.35Name Brands- $4.00Out of pocket- $0|
|Non-institutionalized Income135% Poverty orMedicare Savings ProgramEnrollee||$1,499/single $1,959/couple||$9,470/single $14,960/couple||Deductible- $0Premium in excess of $35.02 Generics- $3.95Name brands- $9.85Out of pocket- $0|
|Non-institutionalized (Partial Subsidy) Income ≤ 150% Poverty||$1,595/single $2,155/couple||$14,790/single $29,520/couple||Deductible- $92.00Total out of pocket 15% (in doughnut hole) Generics after doughnut hole- $3.95Name brands after doughnut hole- $9.85|
Individuals who receive Medicaid, Supplemental Security Income, or a Medicare Savings Program (Qualified Medicare Benefit – QMB, Qualified Individual 1 – QI-1, or Special Low Income Medicare Beneficiary – SLIM-B) on top of their Medicare benefits will be automatically enrolled in Extra Help. Auto-enrollees may be required by their county department of social services to provide proof of their legal presence, income, and financial means. Individuals who are not automatically registered must submit an application through the Social Security Administration, or they can enroll by phone through the Social Security Administration (1-800-772-1213).
How to Qualify for Extra Help/Low-Income Subsidy (LIS) with Part D Costs
If you qualify for Medi-Cal or a certain type ofMedicare Savings Program, you will be automatically enrolled in a prescription plan that participates in the Extra Help/Low-Income Subsidy (LIS) program for 2022. (Qualified Medicare Beneficiary, Specified Low-Income Medicare Beneficiary or Qualified Individual program). The table below describes how much you will pay for your Part D coverage based on whether you qualify for Medi-Cal and/or the Medicare Savings Program (MSP). This assumes that you are enrolled in a Benchmark plan.
|You have…||Your Assets Are at or Below… 1||You Pay|
|Medi-Cal without a Share of Cost (SOC). This includes theAgedDisabled Federal Poverty Level program (A D FPL).Medi-Cal with a SOC and your SOC is met in any one month.||Single: $ 2,000Couple: $ 3,000Note:As of July 1, 2022, the resource limit will be $130,000 for an individual, and $65,000 for each additional family member.|
- There is no monthly fee, and there is no yearly deductible. Copayments of $1.35 each generic pill and $4.00 every brand-name pill
|aMedicare Savings Program, such asQualified Medicare Beneficiary (QMB),Specified Low-Income Beneficiary (SLMB)orQualified Individual (QI)program.|
- There is no yearly deductible. Copayments of $3.95 for generics and $9.85 for brand names are required. There are no copayments for catastrophic coverage.
1The asset limit does not include the amount that can be used for burial expenditures, which is as follows: $1,500 for a single person; $3,000 for a couple. It should be noted that this $1,500 per person for funeral expenditures cannot be held in a bank account for the purposes of Medi-Cal. It has to be put into a burial insurance policy. In the event you do not satisfy the requirements outlined in the chart above, you may be eligible to apply for Extra Help/LIS through the Social Security Administration if you meet the requirements outlined in the table below.
|Your Income Is Below… (Note: does not include the $20 disregard. Also, these are the 2021 figures. 2022 figures will come out by April 2022.)||Your Assets Are at or Below 2 …||You Pay|
|135% of the FPL:|
- Single: $1,449 per month, or $17,388 per year
- Couple: $1,960 per month, or $23,517 per year
- There is no monthly fee, and there is no yearly deductible. Copayments of $3.95 for generic medications and $9.85 for brand name medications
- Single: $1,449 per month, or $17,388 per year
- Couple: $1,960 per month, or $23,517 per year
- There is no monthly fee
- $99 annual deductible
- 15% coinsurance
- Copayments up to $3.95/generic and $9.85/brand-name during catastrophic coverage
- Single: $1,610 per month, or $19,320 per year
- Couple: $2,178 per month, or $26,130 per year
- Monthly premiums based on a sliding scale
- A $99 yearly deductible
- A 15 percent coinsurance rate
- Copayments up to $3.95 for generic drugs and $9.85 for brand-name drugs under catastrophic coverage
1 If you qualify for Extra Help/LIS, you must also enroll in a Medicare Part D prescription medication coverage. 2The authorized amount for funeral expenditures is included in the asset limit: $1,500 for a single person; $3,000 for a couple. It should be noted that this exempt $1,500 per person for burial expenditures can be held in a bank account for LIS purposes.
Extra Help Subsidy for Medicare Part D Prescription Drug Plans
Known as “Extra Help,” Medicare provides varying degrees of assistance to low-income individuals who are unable to pay for the costs of prescription pharmaceuticals over and above what a normal Part D prescription drug plan pays. If you want to be eligible, you must be getting Medicare and have a modest income and assets.
“Extra Help” will pay for the majority of your prescription expenditures, as well as your Medicare Part D payments in some cases. According to Social Security, the Extra Help program can save folks up to $4,900 per year on their Social Security benefits.
Levels of Part D Extra Help
Individuals who are eligible for the Extra Help program fall into one of four categories. The income of the Medicare user in respect to the Federal Poverty Guideline (FPG) or federal poverty level (FPL), as well as the income of the preceding year, are used to establish the categories. In 2020, the FPG for a single individual is less than $12,760 in yearly income ($14,680 in Hawaii and $15,950 in Alaska), according to the Federal Poverty Guidelines. The sum increases by $4,480 per person for larger family units (those who are related by blood, marriage, or adoption and who live together).
- The FPG levels increase by a little amount each year; to find out what the current amounts are for this year, visit Nolo’s page on the federal poverty level (federal poverty level).
- Individuals who qualify for Medicaid and have incomes that fall below the FPG are classified as being in Category One.
- Additionally, their per-prescription copayments are decreased.
- They do not have to pay a premium and do not have coverage gaps, but they do have to pay a larger copayment per prescription than other Medicaid participants.
- In 2020, this is defined as an individual’s monthly income of less than $1,435 and a couple’s monthly income of less than $1,940.
- People who qualify pay no premium or deductible, have no coverage gaps, and have their prescription copayments lowered on a per-pill basis.
- Individuals who are not eligible for Medicaid and have incomes ranging from 136 percent to 149 percent of the federal poverty level fall into this group.
- It is necessary to have assets worth less than $15,000 ($30,000 for a married pair).
- Medicare Savings Programs are available to those who fall into categories 1, 2, or 3 and who have Medicare Part A and/or Part B deductibles that are not covered by insurance.
Enrollment Timing for Extra Help Beneficiaries
If you are qualified for one of the Part D Extra Help low-income subsidy programs but are not a Medicaid recipient, you can enroll in a Part D plan at any time, directly with the Part D plan of your choosing, without having to go through the Marketplace. If the plan does not meet your needs, you may switch to a different one once a year; however, the transition must take place within an open enrollment period to be effective (from November 15 to December 31 each year). If you are a Medicare and Medicaid recipient and you are eligible for Extra Help, you must enroll in a plan with a premium that is at or below the state’s average, or you may be denied assistance.
Even if you don’t sign up for a Medicare Part D plan on your own (and you are a Medicaid user), the Medicare program will enroll you in one that has a premium that is lower than the state’s average.
And if that plan does not meet your needs in terms of prescription coverage, you have the option to switch at any moment.
Applying for Extra Help
Please keep in mind that you must apply for Extra Help in addition to enrolling in a Part D plan. If you believe you may be eligible for a Medicare Part D low-income subsidy, you should submit an application as soon as possible. By applying for this low-income discount, you are not obligated to enroll in any Medicare Part D insurance plan. If you are approved for Extra Help, your Part D plan premium will be significantly less expensive, regardless of the plan you choose to enroll in. Instead of submitting an application to Medicare or a Part D plan, you should submit an application to the Social Security Administration (SSA).
- You can call the Social Security Administration toll-free at 800-772-1213, or you can submit an application online at Social Security’s Extra Help with Prescription Drug Plan Costs.
- If you choose, you can submit an application for Extra Help at a local county Social Services office or at another local government agency in your state that handles Medicaid applications.
- A qualified counselor will be on hand to assist you with your application at each of these programs.
- Once accepted, your Extra Help will be in force for a period of one year from the date of approval.
- Your Extra Help will be automatically renewed if this is the case.
Enrolling in a Part D Plan
Each Part D plan is administered by a private insurance company, which uses its own enrollment forms and procedures to enroll members. Some plans may let you to enroll online, while others may need you to complete paper enrollment paperwork. To find out more about the plan’s coverage and fees, as well as to enroll in the plan, you must contact the plan directly through phone or email. You will only be covered by your Part D plan for the cost of your prescriptions after you have completed enrollment in the plan and after your Medicare Part A or B coverage has started.
As a result, it is a good idea to choose a plan and file an application for Medicare in the months before you become eligible for coverage, so that coverage may begin as soon as you become eligible.
Every month you put off enrolling in Medicare results in a 1 percent increase in your monthly premium.
The benefits of doing so include ensuring that your coverage begins promptly and that you will not be required to pay a higher premium just because you failed to complete the necessary papers on time.
More information about Medicare Part D may be found in our section on Medicare Part D. On May 20, 2020, we made some changes.
Low-Income Subsidy – Medicare Extra Help Program
Beneficiaries who are eligible and have a low income may be eligible for a federal program that assists them in paying for Medicare Part D prescription medication costs. LIS recipients receive aid in paying their Part D monthly premium, yearly deductible, coinsurance, and copayments. They also receive assistance in paying for their Part B monthly premium. Additionally, those registered in the Extra Help program do not experience a gap in prescription medication coverage, sometimes known as the coverage gap or the “donut hole” in Medicare prescription drug coverage.
Medicare Extra Help eligibility
If any of the following apply to you, you may be eligible for the low-income discount provided by Medicare Part D:
- In addition, your yearly income and assets fall below the qualifying requirements. The qualifying requirements for the Medicare Extra Help program may change from year to year. Visit Medicare.gov for the most up-to-date information on coverage levels. Despite the fact that your yearly income exceeds the qualifying limit, you are responsible for the maintenance of additional family members who live in the same home
- You live in Hawaii or Alaska
The following are examples of assets that can be used to determine eligibility:
- CASH and bank accounts, such as checking and savings accounts as well as certificates of deposit Outside of your home abode, you may own real estate. Stocks and bonds, including savings bonds issued by the United States
- Mutual funds and Individual Retirement Accounts (IRAs)
If you qualify for the low-income subsidy, Medicare does not consider resources such as your house (or principal residence), insurance policies, or a car when determining your eligibility. Many people are eligible for Medicare Extra Help discounts but are unaware of their eligibility. The most effective approach to find out if you qualify is to submit an application.
How to apply for Medicare Extra Help
Simple fill out a “Application for Extra Help with Medicare Prescription Drug Plan Costs” (SSA-1020) with Social Security and submit it to them will qualify you for the Medicare low-income subsidy program. You can apply and submit this form using the following methods:
- Applying online at Social Security
- Calling Social Security at 1-800-772-1213 (TTY 1-800-325-0778) and requesting that an application be mailed to you
- Or applying over the phone at 1-800-325-0778. Representatives from the Social Security Administration are accessible by phone Monday through Friday from 7 a.m. to 7 p.m. Visiting your local Social Security office and submitting your application in person
As soon as you submit your application, Social Security will analyze it and, if you are eligible, will give you a written notification in the mail. It is possible to enroll in a Medicare Part D Prescription Drug Plan at that time if you qualify for Extra Help and are not currently enrolled in one.Medicare information is available everywhere. What is difficult is determining which information may be relied upon. We adhere to CMS requirements when it comes to Medicare-related material, so you can be certain that you’re receiving accurate information to help you make the best decisions possible regarding your coverage.