How Are Railroad Retirement Benefits Calculated
- Railroad Retirement benefits are based on months of service and earnings credit.
- Earnings are creditable up to certain annual maximums on the amount of compensation subject to railroad retirement taxes.
Railroad employees and employers pay a Tier I tax which is the same as the Social Security tax. Employees and employers also pay a Tier II tax which contributes to financing Railroad Retirement benefit payments in excess of coverage provided under Social Security.
2021 Employee Tax Withholding:
- Tier I – 6.20 percent
- Tier II 4.90 percent
- Medicare – 1.45 percent *Starting in 2013, an additional tax of 0.9 percent will be withheld by the employer on earnings over $200,000.
2021 Employer Tax Withholding:
Medicare Eligibility: The Major Takeaways
- You become eligible for Medicare Part A if you are 65 and have lived in the U.S. state for at least five years.
- When youre informed youre qualified for Part A, you will be notified that you get approved for Medicare Part B.
- You need to be eligible for Part A and Part B coverage to sign up for the Medicare Advantage plan.
- To be eligible for Part D prescription coverage, you must have either Medicare Part A or Part B, or both.
- You can purchase a Medigap policy if you are enlisted in Medicare Part A and B and do not receive Medicare Advantage or Medicaid health benefits.
Through NewMedicare.com we help you to compare rates from different carriers so that you can make smart decisions about your insurance coverage.
Medicare Part A And Group Coverage
Most people do not pay a premium for Medicare Part A, as long as they paid sufficient Medicare taxes while working.
If youre enrolled in premium-free Part A and are still on your employers group plan, your Part A coverage will not affect your group health insurance coverage, and you wont have to pay a premium for your Part A benefits.
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Ultimate Guide To Railroad Retirement Medicare Benefits
According to the US Railroad Retirement Board, more than 500 thousand people receive railroad retirement benefits, which include retirement, survivor, unemployment, and sickness insurance benefits for railroad workers and their families.
Many railroad retirees can also receive Medicare health insurance benefits. Railroad Retirement Medicare benefits work much the same way as regular Medicare benefits. The difference lies in what organization administers the benefits. The Railroad Retirement board administers railroad Medicare benefits for most eligible people, and the Social Security Administration administers regular Medicare benefits.
Is It Mandatory To Sign Up For Medicare After Age 65
No, it isnt mandatory to join Medicare. People can opt to sign up, or not.
If you don’t qualify for Social Security retirement benefits yet, you may need to manually enroll in Medicare at your local Social Security office, online or over the phone when you turn 65. You can also apply online for your Medicare coverage at www.medicare.gov.
Enrolling in Medicare as soon as youre eligible ensures you get the subsidized health care you deserve without waiting periods or financial penalties.
If you continue to work for a company employing 20 or more people after you turn 65, you could delay your Medicare enrollment. Your employee group plan provides enough medical coverage while youre working, meaning you may be able to wait to sign up for Medicare once you retire without incurring any late penalties.
When Can I Start Collecting Railroad And Social Security Benefits
When you can start drawing your railroad retirement benefits depends on your years of service. You can begin receiving your benefits:
- At age 60, if you have 30 or more years of qualified work, or
- At age 62
Youll need to apply through your local RRB office when you decide to begin receiving your benefits. The agency will begin processing your application up to three months before your benefits start date, so make sure to plan.
Like Social Security, you may receive a reduced benefit amount if you start drawing from it before full retirement age. And like Social Security, that age is 67 for those born in 1960 or later.
Medicare Part B And Group Coverage
Unlike premium-free Part A, Medicare Part B requires you to pay a monthly premium for your Part B benefits .
If youre still receiving health insurance benefits through your employer and are automatically enrolled in Medicare Part B, you may have the option to opt out of Part B until you retire or lose your group health insurance coverage.
Opting out of Part B will prevent you from having to pay monthly premiums for coverage you arent using. Once you retire, you should qualify for a Medicare Special Enrollment Period, which allows you to enroll in Part B later without facing a late enrollment penalty in most cases.
Railroad Retirement Benefit Eligibility Requirements
According to Union Pacific, one of the major railroad companies in the United States, the earliest that Railroad Retirement benefits begin is either age 60 with 30 years of qualifying service, or age 62.
If you have less than 30 years of service, you must wait until full retirement age to receive full benefits. You may be eligible for reduced benefits if youre at least 62, but havent reached full retirement age, which ranges from 65-67 depending on when you were born. For example, full retirement age is 67 for anyone born after 1960.A
Another way you can qualify for Railroad Retirement Board benefits is through disability insurance. You must have at least 10 years of service to qualify for RRB disability insurance.
The Ultimate Guide To Medicare Eligibility
When a person reaches the age of 65, they become eligible for the Medicare insurance program. For most Americans looking forward to receiving Medicare health benefits, eligibility is as simple as turning 65.
However, your eligibility to get Medicare coverage without paying a premium and your eligibility for different Medicare plans is determined by several factors. It includes your health status and work history. Heres what you should know:
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Railroad Retirement And Medicare
If you receive railroad retirement benefits, chances are the Medicare process will be easier for you than most. Because Social Security doles out Medicare benefits, that close relationship between the RRB and Social Security typically means:
- Youre automatically enrolled in Medicare at age 65 if youre receiving RRB benefits. Youll receive Original Medicare but can still decline it to go with a Medicare Advantage option.
- Your monthly premium will be automatically deducted from your RRB payment no bill to keep track of each month.
- Youll contact your RRB office for help instead of the local Medicare office. Just like the Medicare offices, youll be able to handle a lot of your administrative needs through your local RRB field office.
If You Already Receive Benefits From Social Security:
If you already get benefits from Social Security or the Railroad Retirement Board, you are automatically entitled to Medicare Part A and Part B starting the first day of the month you turn age 65. You will not need to do anything to enroll. Your Medicare card will be mailed to you about 3 months before your 65th birthday. If your 65th birthday is February 20, 2010, your Medicare effective date would be February 1, 2010.
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Learn More About Railroad Medicare Benefits
If you need help finding the right Medicare plan, a licensed agent with Medicare Plan Finder may be able to help. Every location has different plans, and it may be difficult to determine what plan would work best. Our agents are highly trained and they can help you determine what kind of plan you need for additional coverage Part D, Medicare Advantage, or Medigap. Call 844-431-1832 or contact us here to set up a no-cost, no-obligation appointment today.
Differences Between Rrb And Social Security Retirement Benefits
RRB retirement benefits differ from Social Security retirement benefits in two important ways:
- Early retirement reductions do not apply if the employee has at least 30 years of service in RRB-covered employment. These individuals can collect benefits as early as age 60 with no age-based benefits reduction.
- A supplemental annuity is payable if an employee had at least 25 years of service that began before Oct. 1, 1981 and has a current connection to the railroad. Eligibility for this annuity begins at age 60 if the employee has at least 30 years of creditable service, and at age 65 if the employee has 25 to 29 years of service. The fixed maximum amount of a supplemental annuity is $43 a month in 2021.
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Speak With A Licensed Insurance Agent
Whether youre retired or are planning to retire, a licensed insurance agent can help you better understand your Medicare options. Call today to speak with a licensed insurance agent.
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1 10-minute claim is based solely on the time to complete the e-application if you have your Medicare card and other pertinent information available when you apply. The time to shop for plans, compare rates, and estimate drug costs is not factored into the claim. Application time could be longer. Actual time to enroll will depend on the consumer and their plan comparison needs.
About the author
Christian Worstell is a licensed insurance agent and a Senior Staff Writer for MedicareAdvantage.com. He is passionate about helping people navigate the complexities of Medicare and understand their coverage options.
His work has been featured in outlets such as Vox, MSN, and The Washington Post, and he is a frequent contributor to health care and finance blogs.
Christian is a graduate of Shippensburg University with a bachelors degree in journalism. He currently lives in Raleigh, NC.
Where you’ve seen coverage of Christian’s research and reports:
Plan availability varies by region and state. For a complete list of available plans, please contact 1-800-MEDICARE , 24 hours a day/7 days a week or consult www.medicare.gov.
How To Apply For Medicare In Nevada
To apply for Medicare in Nevada, you must be a United States citizen or legal permanent resident of at least five continuous years. Youre generally eligible when you are 65 or older, but you may qualify under 65 through disability or having certain conditions. You can automatically qualify by disability if you have been receiving disability benefits for at least two years.
In some situations, Medicare enrollment occurs automatically. You may not have to do anything to enroll in Medicare if any of the following applies to you:
- You receive Social Security benefits or Railroad Retirement Board benefits before 65. You can apply for Medicare at the time you apply for retirement benefits. Youll be automatically enrolled in Medicare on the first day of the month that you turn 65 if your birthday falls on the first day of the month, youll be automatically enrolled on the first day of the month before you turn 65.
- Youve been getting Social Security Administration disability benefits for 24 months youll be automatically enrolled starting the 25th month of disability benefits.
- You have Lou Gehrigs disease youll be automatically enrolled the month your disability benefits start.
If you have end-stage renal disease, you may also be eligible for Medicare coverage, even if you are under 65. However, you will need to manually apply for Medicare through Social Security or the Railroad Retirement Board.
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Do You Qualify For Railroad Retirement Benefits
The high-level criteria for receiving railroad retirement from the RRB is relatively simple. You qualify for railroad retirement benefits if you:
- performed creditable railroad service for 10 years.
- performed creditable railroad service for five years, if that work occurred after 1995.
The RRB also breaks down the benefits into tiers and awards them based on employee and employer tax withholdings. All qualified beneficiaries enter Tier I, but not all Tier I recipients have enough creditable earnings to receive Tier II benefits.
Benefits arent limited to full-time, daily employees workers get credit for a months worth of railroad service for any amount of time worked within that month, even if its a single days work. If you have any questions about your eligibility or benefits, contact your local RRB field office.
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Rr Medicare: The Transition To New Numbers Ends December 31
Last July, the Railroad Retirement Board mailed approximately 450,000 new Railroad Medicare cards with new Medicare Numbers. The new Medicare Numbers, which are unique to each person with Railroad Medicare and do not contain Social Security Number , replace the former Health Insurance Claim Numbers . Providers can bill claims to Medicare with either a HICN or a new Medicare Number through December 31, 2019.
At this time, approximately 70% of the Railroad Medicare claims received are submitted with Medicare Numbers. Beginning January 1, 2020, all providers will be required to file claims with Medicare Numbers only.
When its time for a doctors appointment or other Medicare service, be sure to take your new card with you. Your providers office knows everyone should have a new Medicare Number, and they will need to keep a record of your Medicare Number so they can bill Railroad Medicare correctly.
If your provider does not have a copy of your card, they may be able to look up your information with their local Medicare Administrative Contractor or with Palmetto GBA Railroad Medicare through our online provider portals. These portals give authorized providers access to claims history, eligibility and more. The portals also contain a tool that allows providers to look up a Medicare Number with the following patient information:
- Last Name
- Date of Birth
- Social Security Number
Sample RRB Medicare Card:
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If You Are Under Age 65 And Disabled:
If you are under age 65 and disabled, and have been entitled to disability benefits under Social Security or the Railroad Retirement Board for 24 months, you will be automatically entitled to Medicare Part A and Part B beginning the 25th month of disability benefit entitlement. You will not need to do anything to enroll in Medicare. Your Medicare card will be mailed to you about 3 months before your Medicare entitlement date. , you get your Medicare benefits the first month you get disability benefits from Social Security or the Railroad Retirement Board.) For more information about enrollment, call the Social Security Administration at 1-800-772-1213 or visit the Social Security web site. See also Social Security’s Medicare FAQs.
For more information, see Medicare.gov
How Do I Enroll In Medicare
Administration at 1-800-772-1213 to enroll in Medicare or to ask questions about whether you are eligible. You can also visit their web site at www.socialsecurity.gov.
The Medicare.gov Web site also has a tool to help you determine if you are eligibile for Medicare and when you can enroll. It is called the Medicare Eligibility Tool.
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How Do You Bill Railroad Medicare
Keeping this in view, how do I bill Railroad Medicare claims?
Secondly, will Railroad Medicare accept paper claims? Palmetto GBA Railroad Medicare continues to receive paper claims submitted on the old CMS-1500 version claim form. We also continue to receive both old and new paper claims from providers who are required to file claims electronically.
Thereof, what is the difference between Medicare and Railroad Medicare?
A: This can easily happen as the two Medicare cards are very similar. A: The only difference is that retired railroad beneficiaries have their Part B benefits administered by the Palmetto GBA Railroad Retirement Board Specialty Medicare Administrative Contractor regardless of where they live.
What is Railroad Medicare insurance?
The Medicare program covers railroad workers just like workers under social security. Railroad retirement payroll taxes include a Medicare hospital insurance tax just like social security payroll taxes.
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