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I work and collect Social Security. Can I boost my benefits?

Editor’s Note: Journalist Philip Moeller is here to provide the answers you need on aging and retirement. His weekly column, “Ask Phil,” aims to help older Americans and their families by answering their health care and financial questions. Phil is the author of “Get What’s Yours for Medicare,” and co-author of “Get What’s Yours: The Revised Secrets to Maxing Out Your Social Security.” Send your questions to Phil; and he will answer as many as he can.

Allan – Nevada: I took my Social Security at 62. I continued to work for 12 more years before retiring at 74. Am I eligible for any increase in my monthly benefit because of those 12 additional years of earnings and payroll taxes?

Phil Moeller: Social Security bases your benefits on your highest 35 years of wage earnings. If any of these 12 years counts as a new top-35 year, you should get a bump up in benefits. However, the effect of any single year’s higher earnings will be modest. The agency uses a complex measure of past wage inflation to weight each year’s wages. This means that making more money in a recent year won’t necessarily cause that year to become a new top-35 year.

You can get an idea of your official earnings record by opening an online My Social Security account. If you think your benefits should have been increased, you should call the agency.

Robert – Ala.: I went on Social Security at age 62. Is there any way I can increase my benefits? I am still working.

Phil Moeller: You can suspend your Social Security payments, which you are eligible to do once you reach your full retirement age (FRA). When you resumed your benefits, they would have grown by 8 percent a year until as late as age 70. Of course, you would not receive any payment during the suspension period, and this may not be feasible for you.

Roberta – Maine: I am 65 and will reach my full retirement age in August. I’m still working, but have few savings, and would like to apply for my late husband’s Social Security benefits and defer mine, which are higher, until later. My health care is now covered at work, where there are only four employees. It is a high deductible plan, in which my employer pays $2,700 annually into our health savings accounts (HSAs). I have yet not signed up for Medicare, but have been told I cannot have an HSA if I do. Can my employer pay the Part B premiums and cost of a Medigap policy or compensate me in another way if I choose to take Medicare? What options do I or my employer have?

Phil Moeller: Let’s tackle Medicare first. Most small-employer health plans require people to get Medicare when they turn 65. At that time, the employer plan becomes the secondary payer of covered claims, and Medicare becomes the primary payer. You should check with your employer about the terms of its plan.

You are correct that having Medicare rules out continued contributions to an HSA. If your employer plan requires you to get Medicare anyway, you would have no choice but to end those contributions, including the $2,700 contributed by your employer.

Employers are not supposed to directly pay Medicare premiums. Doing so, as you might imagine, can be seen as inducing employees to drop the employer plan in order to enroll in Medicare. Given that the government subsidizes people on Medicare, paying people to leave employer plans is not allowed.
Your employer is, however, free to adjust your salary or give you a performance bonus. Given that you work in a small organization, I think you should sit down with your employer and come up with a legal approach that works for both parties.

Now, as for Social Security, I’d suggest you wait until your FRA to file for a survivor’s benefit. This will allow you to receive the maximum award, and at that age, your Social Security payments will not trigger the agency’s earning test rules. Then, you can later file for your retirement benefit as you suggest.

Ruth: I am 68 years old and work full-time. I do not plan to take my Social security until I reach 70. However, do I qualify for my deceased former husband’s benefit at this time, with no penalties? We were married for 35 years and divorced in 2006. He passed away in 2012 while collecting Social Security.

Phil Moeller: If you did not remarry prior to age 60, you do qualify for a full survivor benefit. This benefit reached its maximum amount when you turned 66, so I wish you had written me two years ago!

Because you would be “late” in filing, Social Security should pay you a lump sum of six months of retroactive benefits when it begins making monthly payments to you. That’s the furthest back in time the agency will go for late benefit filings.

When you file for this benefit, you can still earn delayed retirement credits on your own retirement benefit. At 70, you can file for that and receive an additional benefit if that benefit is larger than your survivor benefit, which is technically called an ex-spousal survivor benefit.

Mike: I am 58 and my wife is 65. She does not have enough quarters to claim Social Security on her work records. When I turn 62, I am planning on retiring and claiming Social Security. Can she claim spousal benefits when I retire? Will it reduce my benefits? She is currently paying for Medicare Part A. Can we get that reduced if she collects spousal benefits?

Phil Moeller: Yes, your wife can claim a spousal benefit if you file for your own Social Security retirement benefit when you turn 62. At that age, she also should be able to qualify for premium-free Part A as your spouse. This eligibility begins when you turn 62. It is not dependent on whether you file for benefits at that time.

Anonymous: My brother is in hospice. He lives in Florida but wants to be buried in Michigan. Will Medicare cover hospice in Michigan when he gets there?

Phil Moeller: I’m sorry to hear about your brother. Medicare’s hospice benefit is good anywhere in the country. I would urge his wife to call ahead to find a good hospice provider in Michigan before she takes him there.

Joe: I am 71 and have had health insurance from my wife’s employer. She retired at age 63 and is about to turn 65, at which time her health insurance will change to a plan that works with Medicare. In getting ready to apply for Medicare myself, I called Social Security and was told I should have signed up for Medicare when she retired at 63, and that I would have to pay late-enrollment penalties. No one told me that she had to be working or else I would have signed up earlier. Since I have kept the insurance through her employer from 6 years ago and I still have it today, will I have to pay these penalties?

Phil Moeller: The governing rule here is whether the insurance your wife has had — and which has been covering you — is considered to be an active group employer policy. If it is, you will not face penalties. If it is not, and instead has been either a retiree plan or some other form of coverage, you will be liable for late-enrollment penalties.

Here is the form that her employer can sign to confirm that you have had continuous coverage through her employer plan for the past six years. If you present this signed form to Social Security, you should not have to pay penalties.

Massy – N.Y.: I am 71 years old, retired, and have Medicare A and B. I also have group health insurance through my wife, who’s still working, and it is my primary insurance. I have been referred to a surgeon by my doctor, but the surgeon is not in my primary insurer’s network. Can I end my primary insurance and make Medicare my primary insurer?

Phil Moeller: You probably can do this, although I think people always should check with their employer plan first to understand the consequences of doing so. Before cancelling your workplace coverage. I’d also suggest you contact Medicare to confirm that cancelling your work plan is the only way it would provide primary coverage of your surgery. I’m assuming you’ve already confirmed that your preferred surgeon accepts Medicare.