This section explains deductions from your monthly annuity for other Federal programs.

Medicare Coverage

General Information About Medicare

Medicare is a two part Federal health insurance program, administered by the Centers for Medicare & Medicaid Services (CMS), for people who are age 65 or older; who are totally and permanently disabled, or who have permanent kidney failure. One part of Medicare is Hospital Insurance (also known as Part A). The other part is Medical Insurance (also known as Part B).

If you are eligible for Medicare because of permanent kidney failure (End Stage Renal Disease), you must call or visit your local Social Security Administration office or call the Social Security Administration at 1-800-772-1213 to enroll in Medicare Part A and Part B. For all other Medicare eligibility, the RRB can help you enroll in Medicare Part A and Part B.

• Hospital Insurance (Part A) can help pay for four kinds of care:
  • inpatient hospital care; 
  • inpatient care in a skilled nursing facility following a hospital stay;
  • care in your home by a home health agency; and,
  • hospice care.

  As soon as you are determined to be eligible for Medicare, you will automatically be enrolled for Hospital Insurance coverage (Part A). You do not pay a monthly premium for your Hospital Insurance (Part A).

• Medical Insurance (Part B) can help pay for the following additional kinds of medically necessary care:
  • doctors’ services;
  • outpatient hospital services; and,
  • a number of other medical services and supplies that are not covered by the Hospital Insurance (Part A).

Medical Insurance (Part B) at Age 65 or Older

Enrollment for Medical Insurance (Part B) depends on your age when you file your spouse or divorced spouse annuity application.

• If you are under age 64 years and 5 months when you file your annuity application, you will be automatically enrolled in Medical Insurance (Part B) at age 65, unless you decline this coverage.
• If you are at least age 64 years and 5 months, when you file your annuity application, you can use your annuity application to enroll for Medical Insurance (Part B).

If you want Medical Insurance (Part B) at age 65, you must pay a premium for each month you have this insurance. If you receive an annuity, the premium will usually be deducted from your monthly annuity rate.

If you do not want Medical Insurance (Part B) at age 65 and then decide at a later date that you do want to sign up, your protection may be delayed and your premiums may be more expensive.

If at any time, you wish to cancel the election that you make on your annuity application, you must contact the nearest office of the RRB.

Special Enrollment Period (SEP) -

You may delay enrolling in Medical Insurance (Part B) coverage without penalty if you are covered under a Group Health Plan (GHP) at age 65. The GHP may be based on your own employment or the employee's employment. You may enroll in Medical Insurance (Part B) at any time while you are covered under the GHP or you can enroll during a Special Enrollment Period (SEP). Your SEP begins when the employment on which the GHP is based ends or the first month you are no longer covered under the GHP, whichever comes first. The SEP lasts for eight months.

The beginning date of your Medical Insurance (Part B) coverage depends on the status of your GHP enrollment when you file for the Medical Insurance (Part B).

• If you file for Medical Insurance (Part B) during any month in which you are enrolled in an GHP, or in the first month of your SEP, you can choose the effective date of your Medical Insurance (Part B). The effective date can be the first day of the month you file or the first day of any of the following three months after the month of filing.

  Example 1 - If your GHP coverage based on current employment has not ended and you file for Medical Insurance (Part B) in May, you can chose May 1, June 1, July 1, or August 1 for you Medical Insurance (Part B) effective date.
  
  Example 2 - If you GHP coverage based on current employment ends on March 19, and you file for Medical Insurance (Part B) the following applies:

  • If you file anytime after March 19, but before April 1, you can choose the effective date of March 1, April 1, May 1, or June 1, for your Medical Insurance (Part B); or,
  • If you file anytime in April, you can choose the effective date of April 1, May 1, June 1, or July 1, for your Medical Insurance (Part B).
• If you file for Medical Insurance (Part B) during the other seven months of your SEP, your Medical Insurance (Part B) will begin the first day of the month after the month you file. The beginning date can be no later than the ninth month after the start of your SEP.
  
  Example - If your GHP coverage based on current employment ends on March 19, and you file for Medical Insurance (Part B) anytime during the period May 1 through November 30, your Medical Insurance (Part B) will begin the month after the month in which you file your annuity application.

If you are already enrolled in Medical Insurance (Part B) and are paying higher premiums due to late enrollment, and you had GHP coverage at age 65, you may use your annuity application to request a review of the Medical Insurance (Part B) premium rate you are paying.

Prescription Drugs -

In 2003, new Medicare legislation was enacted. Among other things, the legislation provides for a prescription drug benefit for Medicare beneficiaries. Until that benefit goes into effect in 2006, Medicare beneficiaries will be able to purchase a prescription drug discount card. Individuals with incomes below certain levels may qualify for $600 credit to be added to the discount card that may be used to help pay for prescription drugs.

Early Medicare Based on Disability -

The RRA does not provide a spouse annuity or divorced spouse annuity based on disability. If you are totally disabled for all employment, you may be covered by early Medicare before age 65 on your own earnings record. If you have at least 120 months of railroad service, or 60-119 months of railroad service with at least 60 months of railroad service after 1995, refer to Booklet RB-1D Employee Disability Benefits for an explanation of the disability requirements. Otherwise, you should contact SSA to file for early Medicare on you own earnings record.

More Information About Medicare -

If you need more information about Medicare, contact the nearest RRB office.

Federal Income Tax Withholding

Withholding for Federal Income Tax may occur, either based on your election filed on Form W-4P "Withholding Election Form", or, if you do not file a Form W-4P, based on a status of "Married with three dependents."