The Washington Report
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October 18, 2023
Note to Subscribers
While we do our best to provide timely updates, it is possible that the information shared in the newsletter may change after our publication deadline.
Health
CMS Releases 2024 Medicare Parts A & B Premiums and Deductibles; Medicare Part D Income-Related Monthly Adjustment Amounts
On October 12, 2023, the Centers for Medicare & Medicaid Services (CMS) released the 2024 premiums, deductibles, and coinsurance amounts for the Medicare Part A and Part B programs, and the 2024 Medicare Part D income-related monthly adjustment amounts.
The Medicare Part A inpatient hospital deductible that beneficiaries pay if admitted to the hospital will be $1,632 in 2024, an increase of $32 from $1,600 in 2023. The Part A inpatient hospital deductible covers beneficiaries’ share of costs for the first 60 days of Medicare-covered inpatient hospital care in a benefit period. In 2024, beneficiaries must pay a coinsurance amount of $408 per day for the sixty-first through ninetieth day of a hospitalization ($400 in 2023) in a benefit period and $816 per day for lifetime reserve days ($800 in 2023). For beneficiaries in skilled nursing facilities, the daily coinsurance for days 21 through 100 of extended care services in a benefit period will be $204 in 2024 ($200 in 2023).
The standard monthly premium for Medicare Part B enrollees will be $174.70 for 2024, an increase of $9.80 from $164.90 in 2023. The annual deductible for all Medicare Part B beneficiaries is $240 in 2024, an increase of $14 from the annual deductible of $226 in 2023.
Since 2011, a beneficiary’s Medicare Part D monthly premium is based on income. These income-related monthly adjustment amounts affect roughly 8 percent of people with Medicare Part D. These individuals pay the income-related monthly adjustment amount in addition to their Part D premium. Part D premiums vary by plan and roughly two-thirds are paid directly to the plan, with the remaining deducted from Social Security benefit checks. The Part D income-related monthly adjustment amounts are all deducted from Social Security benefit checks. The 2024 Part D income-related monthly adjustment amounts for high-income beneficiaries are shown in a table found on the CMS Fact Sheet. Please refer to the CMS Fact Sheet below for specific provisions.
The CMS Fact Sheet is available here.
The Calendar Year 2024 Inpatient Hospital Deductible and Hospital and Extended Care Services Coinsurance Amounts Notice is available here.
The Medicare Part B Monthly Actuarial Rates, Premium Rates, and Annual Deductible Beginning January 1, 2024, Notice is available here.
Retirement
PBGC Announces 2024 Premium Rates for Single-Employer and Multiemployer Plans
On October 13, 2023, the Pension Benefit Guaranty Corporation (PBGC) announced the 2024 flat-rate premiums for single-employer and multiemployer plans. For the 2024 plan year, the per-participant flat-rate premium for single-employer plans is $101 (up from $96.00 in 2023) and $37.00 for multiemployer plans (up from $35.00 in 2023). For plan years beginning in 2024, the variable-rate premium (VRP) for single-employer plans remains at $52.00 per $1,000 of unfunded vested benefits, unchanged from the 2023 rate. For 2024, the VRP is capped at $686 times the number of participants (up from a 2023 cap of $652). Plans sponsored by small employers (generally fewer than 25 employees) may be subject to a lower cap.
For additional information on VRPs, as well as other current and historical data, please refer to the Premium Rate website.
The 2024 PBGC premium rates are available here.
Other HR/Employment
SSA Releases 2024 Indexed Figures; Announces 3.2% Benefit Increase
The Social Security Administration (SSA) released the Social Security 2024 indexed figures on October 12, 2023. The SSA announced that there will be a 3.2% Cost-of-Living Adjustment (COLA) for 2024. Some other changes that take effect in January of each year are based on the increase in average wages. Relevant figures are shown below.
COLA: Based on the increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers, Social Security and Supplemental Security Income beneficiaries will receive a 3.2% COLA for 2024. (The 2023 COLA was 8.7%.)
Wage Base: The 2024 Social Security wage base is $168,600. (The 2023 amount was $160,200.)
FICA/Medicare Tax Rate: The FICA tax rate remains at 7.65%: 6.20% for Social Security and 1.45% for Medicare combined.
Beginning in 2013, the Affordable Care Act increased the Medicare tax rate on wages by 0.9% (from 1.45% to 2.35%) for higher-income individuals. The payroll tax increase applies to wages over $200,000 for single tax filers and $250,000 for couples filing jointly ($125,000 for a married individual filing separately). The tax rates above do not include the 0.9%. The Internal Revenue Service has provided frequently asked questions on the Medicare tax increase, available here.
Maximum Monthly Benefit: For someone retiring at full retirement age in 2024, the maximum monthly benefit is $3,822. (The 2023 amount was $3,627.)
Annual Earnings Test Limit: For individuals under full retirement age, the 2024 annual earnings test limit is $22,320. (The 2023 amount was $21,240.) For individuals attaining full retirement age in 2024, the annual earnings test limit for the months prior to attaining full retirement age is $59,520. (The 2023 amount was $56,520.) There is no annual earnings test for individuals who have attained full retirement age.
A more detailed Aon bulletin, SSA Releases 2024 Indexed Figures; Announces 3.2% Benefit Increase, is available in the Publications section of the newsletter.
More information on the SSA COLA is available here.
A Fact Sheet on the SSA's 2024 Social Security changes is available here.
The October 12, 2023, news release is available here.
Aon Publications
SSA Releases 2024 Indexed Figures; Announces 3.2% Benefit Increase
The Social Security Administration (SSA) released the Social Security 2024 indexed figures on October 12, 2023. The SSA announced that there will be an 3.2% Cost-of-Living Adjustment for 2024. Some other changes that take effect in January of each year are based on the increase in average wages.
The Aon bulletin is available here.
Aon’s Year-End Update: Opportunities for Retirement Plan Sponsors and Fiduciaries
Aon’s Retirement Legal Consulting & Compliance practice is pleased to present its Year-End Update: Opportunities for Retirement Plan Sponsors and Fiduciaries. This Update focuses on many of the plan sponsor and fiduciary issues that may be of concern for the remainder of 2023 while presenting some risk mitigation and planning opportunities to consider for 2024. These areas can include strategies to mitigate fiduciary risk, amending plan documents in anticipation of a future annuity buyout or plan termination, and actions that may position the plan sponsor to avoid future claims, litigation, or adverse audit findings.
Aon’s Year-End Update: Opportunities for Retirement Plan Sponsors and Fiduciaries is available here.