EDITOR'S NOTE: This article was originally published in the May 2011 issue of Kiplinger's Retirement Report. To subscribe, click here.
Do you have a beef with the Social Security Administration? Perhaps the agency didn't give you credit for working for certain years. Or maybe it overpaid you and is demanding the money back, even though the goof was the agency's fault. Consider an appeal.
While most appeals challenge Social Security's denial of disability claims, beneficiaries can seek a reevaluation of just about any benefits decision. You also can contest Medicare enrollment and eligibility decisions through the Social Security appeals process.
The first step in the four-rung process is relatively easy. You must submit an appeals form within 60 days after Social Security notifies you of its decision. "They're not asking for a 20-page brief," says Nancy Shor, executive director of the National Organization of Social Security Claimants' Representatives (www.nosscr.org), a trade group of lawyers who represent beneficiaries. "They just want an explanation of your position and any documentation you have."
You can find the form, "Request for Reconsideration" (SSA-561-U2), at www.ssa.gov. At the same time, Shor says, visit a local office to see if you can straighten out the problem informally.
You may be able to get an initial decision overturned if you prove that an agency employee steered you wrong. For Medicare enrollment claims, if you object to a late-enrollment penalty, for example, you can petition for "equitable relief," while filing separately for reconsideration, says Hannah Oakland, with the Medicare Rights Center. "You write a letter to the Social Security Administration outlining the misinformation," she says.
That's what Paul Loukides did. Loukides, now 73, took an early-retirement offer from Albion College, in Michigan, where he was a professor. The offer included health coverage until he was 70, and he paid premiums to cover his wife, Nora, who is the same age.
Loukides called the local Social Security office to check on Medicare Part B requirements. He says he was told that as long as he had employer-based coverage, he did not have to enroll in Medicare Part B.
The couple moved to Charlottesville, Va. Before his coverage ended, Loukides visited the Social Security office to enroll in Medicare. The representative told him that the couple should have applied for Part B after he left his job. The agency imposed a late-enrollment penalty of 40% each year for the rest of their lives -- close to $1,000 a year.
It Pays to Be Tenacious
At the suggestion of Kiplinger's Retirement Report, Loukides appealed that decision. He sought equitable relief, arguing that agency personnel in Michigan had given him the wrong information. The government denied his request. The reason: He missed the enrollment deadline. "I didn't disagree, but the letter of denial did not address the issues raised in my appeal," he says.
So, he filed for reconsideration, again arguing he had been misinformed. Apparently, the agency agreed. In April, Loukides was told that he and Nora would no longer pay the penalties. Several days later, nearly $4,000 in penalties he had paid since he and Nora enrolled in Medicare at age 70 showed up in their bank account. "I'm tempted to have the SSA notification letter framed and hung on the wall," he says.
If Loukides had lost, he could have asked for a hearing before an administrative law judge. Agency personnel do not appear. The next step is a review by an appeals council. The council will either decide your case or send it to the administrative law judge.
Rarely do cases make it to the U.S. District Court level. Rodney Melkonoff, a lawyer in Phoenix, Ariz., recalls one case where a small-business owner decided to turn the firm over to his wife before he reached his full retirement age. The agency argued that he was still working, and it docked his benefits for the income he received over the Social Security "earnings limit." The beneficiary claimed he was no longer employed -- and won.