Financial Planning
Equalizing Distributions to Children - Using a Will or Trust Equalization Clause
Equalizing Distributions to Children Using a Will or Trust Equalization Clause
Fortune 500 employees or retirees must have a comprehensive understanding of the Medicare Open Enrollment Period and how to maximize it. From October 15 to December 7, the Medicare Open Enrollment Period is your annual opportunity to switch to a more suitable Medicare health and prescription drug plan. The Medicare premiums, deductibles, and other costs for 2023 have been released just in time for Open Enrollment, and surprisingly, some of these costs are lower than they were the previous year.
What to consider
As a starting point, we encourage all Fortune 500 employees and retirees to review the materials your plan has sent you. Since last year, the offered coverage, costs, and provider network may have changed. Perhaps your health has changed, or you anticipate the need for medical care, new or more costly prescription medications, or both. Changes can be made if your current plan does not satisfy your requirements or fit your budget. However, if you are satisfied with your current circumstance, you need take no action. Your current protection will be maintained.
According to a recent survey conducted by the Kaiser Family Foundation in October 2022, nearly 60% of Fortune 500 employees and retirees who switched Medicare Advantage plans during the Open Enrollment Period in previous years reported saving money on their healthcare costs. Individuals were able to find plans with greater coverage at a lower price if they reviewed and compared plan options thoroughly, according to the findings. This emphasizes the significance of actively enrolling in Medicare during the Open Enrollment Period and exploring various plan options to maximize savings and ensure comprehensive healthcare coverage for Fortune 500 employees and retirees.
Fortune 500 employees and retirees should be aware that the Medicare Open Enrollment Period not only allows them to review and change their health and prescription drug plans but also presents an opportunity to explore additional benefits beyond traditional Medicare. Medicare Advantage plans, which offer all-in-one coverage that often includes prescription drugs, dental, vision, and fitness benefits, have been growing in popularity. According to a report by America's Health Insurance Plans (AHIP), over 27 million people were enrolled in Medicare Advantage plans as of 2022, and this number is expected to continue rising. Considering Medicare Advantage plans during the Open Enrollment Period can help Fortune 500 employees and retirees find comprehensive coverage tailored to their specific needs and potentially save on healthcare costs.
Open Enrollment allows you to:- Medicare Advantage should replace Original Medicare.
- Transition to Original Medicare from Medicare Advantage
- Substitute another Medicare Advantage Plan for an existing plan.
- Change from a Medicare Advantage Plan that includes coverage for prescription drugs to one that does not.
- Change from a Medicare Advantage Plan that does not cover prescription drugs to a Medicare Advantage Plan that does cover prescription drugs.
- Participate in a Medicare prescription drug plan (Part D).
- Change Medicare Part D coverage from one plan to another.
- Renounce your Part D coverage completely
Any changes made during Open Enrollment will be implemented on January 1, 2023.
Medicare Part B (Medical Insurance) costs for 2023
Numerous Fortune 500 customers have inquired about the 2023 Medicare cost changes. The majority of Medicare beneficiaries who also receive Social Security benefits will pay the standard monthly Part B premium of $164.90 in 2023. Due to lower-than-anticipated spending on Aduhelm and other Part B items and services, this premium is $5.20 less than it was in 2022.
Higher-income Fortune 500 employees and retirees may be required to pay a higher premium than the standard rate. If your modified adjusted gross income (MAGI) as reported on your federal income tax return from two years ago (2021) exceeds a certain amount, you will pay the standard premium amount plus an Income-Related Monthly Adjustment Amount (IRMAA) as shown in the table below.
| You filed an individual income tax return with MAGI that was: | You filed a joint income tax return with MAGI that was: | You filed an income tax return as married filing separately with MAGI that was: | Total monthly premium in 2023 is: | *Total monthly premium in 2023 immunosuppressive drug coverage only is: |
| $97,000 or less | $194,000 or less | $97,000 or less | $164.90 | $97.10 |
| Above $97,000 up to $123,000 | Above $194,000 up to $246,000 | N/A | $230.80 | $161.80 |
| Above $123,000 up to $153,000 | Above $246,000 up to $306,000 | N/A | $329.70 | $258.90 |
| Above $153,000 up to $183,000 | Above $306,000 up to $366,000 | N/A | $428.60 | $356.00 |
| Above $183,000 and less than $500,000 | Above $366,000 and less than $750,000 | Above $97,000 and less than $403,000 | $527.50 | $453.10 |
| $500,000 and above | $750,000 and above | $403,000 and above | $560.50 | $485.50 |
Higher-income Employees and retirees of Fortune 500 may be required to pay a higher premium for a Medicare Part D prescription drug plan, as an IRMAA will be added to the Part D basic premium based on the same income limits shown in the table above. In 2023, variable Part D premiums are anticipated to average $31.50 per month, down from $33.08 per month in 2020. Before
Fortune 500 employees and retirees with Medicare Part B must meet an annual deductible prior to Original Medicare coverage commencing. This deduction decreases from $233 in 2022 to $226 in 2023.
This premium applies to a new Medicare benefit that extends coverage for immunosuppressive medications for patients with end-stage renal disease who are eligible for Medicare. Medicare coverage, including coverage for immunosuppressive medications, terminated 36 months after a successful kidney transplant prior to 2023. Beginning on January 1, 2023, Medicare will offer a new benefit to help uninsured individuals pay for immunosuppressive medications beyond 36 months. There are no additional products or services included. The depicted tax rates apply to individuals and married couples who file tax returns. Beneficiaries filing as married filing separately are subject to different premiums.
Medicare Part A (Hospital Insurance) costs for 2023- Will be $1,600 per benefit period, up from $1,556 in 2020. Those who must purchase coverage will pay up to $506 per month in Part A premiums, up from $499 in 2022. — The majority of individuals do not pay a Medicare Part A premium Part A coinsurance: $400 per day for days 61-90 and $800 per day after day 90, up to a maximum of 60 days per lifetime (increased from $389 and $778 in 2022).
- Medicare Part A (Hospital Insurance) hospitalization deductible in 2023
- Part A skilled nursing facility coinsurance: $200 per benefit period for days 21-100, up from $194.50 in 2020.
Conclusion
Imagine that you are a seasoned traveler who enjoys discovering new destinations and hidden treasures. During the Annual Travel Planning Period, you have the opportunity to assess and modify your travel itinerary. This period enables you to evaluate your needs, compare various travel packages, and make adjustments to ensure that you have the best experience at the most reasonable price. Similarly, Fortune 500 employees enrolling during the Medicare Open Enrollment Period should view this time as their Annual Healthcare Planning Period. Similar to planning a vacation, you can assess your healthcare requirements, investigate Medicare plans, and make adjustments to find the best coverage that fits your budget. By taking an active role in this process, you can secure a healthcare plan that provides optimal benefits while keeping your costs low, ensuring a seamless and enjoyable retirement.
The Medicare Open Enrollment Period and its impact on Fortune 500 employees and retirees can be likened to the process of updating one's investment portfolio. Just as diligent investors periodically review and adjust their portfolio to align with their financial goals and changing market conditions, individuals in the Open Enrollment Period have the opportunity to assess their healthcare needs and make adjustments to their Medicare plans. Similar to diversifying investments to mitigate risk and maximize returns, exploring different Medicare plan options during this period can help Fortune 500 employees and retirees optimize their healthcare coverage while managing costs. Just as a well-managed portfolio adapts to market trends and personal circumstances, actively participating in the Open Enrollment Period allows individuals to secure a Medicare plan that fits their evolving healthcare needs and provides peace of mind for a healthy retirement.
This material was prepared by Broadridge Investor Communication Solutions, Inc., and does not necessarily represent the views of The Retirement Group or FSC Financial Corp. This information should not be construed as investment advice. Neither the named Representatives nor Broker/Dealer gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. The publisher is not engaged in rendering legal, accounting or other professional services. If other expert assistance is needed, the reader is advised to engage the services of a competent professional. Please consult your Financial Advisor for further information or call 800-900-5867.
The Retirement Group is not affiliated with nor endorsed by your company. We are an independent financial advisory group that focuses on transition planning and lump sum distribution. Neither The Retirement Group or FSC Securities provide tax or legal advice. Please call our office at 800-900-5867 if you have additional questions or need help in the retirement planning process.
The Retirement Group is a Registered Investment Advisor not affiliated with FSC Securities and may be reached at www.theretirementgroup.com.
