Social Security and Medicare

On October 18, 2016, the Social Security Administration announced that the cost-of-living adjustment (COLA) for Social Security benefits will be 0.3 percent for 2017. Because of the low Social Security COLA, a statutory "hold harmless" provision designed to protect seniors, will largely prevent Part B premiums from increasing for about 70 percent of beneficiaries. Among this group, the average 2017 premium will be about $109.00, compared to $104.90 for the past four years.

For the remaining roughly 30 percent of beneficiaries, the standard monthly premium for Medicare Part B will be $134.00 for 2017, a 10 percent increase from the 2016 premium of $121.80.

Medicare Part B beneficiaries not subject to the "hold harmless" provision include beneficiaries who do not receive Social Security benefits, those who enroll in Part B for the first time in 2017, those who are directly billed for their Part B premium, those who are dually eligible for Medicaid and have their premium paid by state Medicaid agencies, and those who pay an income-related premium. These groups represent approximately 30 percent of total Part B beneficiaries.

The annual deductible for all Medicare Part B beneficiaries will be $183 in 2017 (compared to $166 in 2016). Premiums and deductibles for Medicare Advantage and prescription drug plans are already finalized and are unaffected by this announcement.

So, how do property managers react?

Owner/agent completing AR or IR certifications effective in January, February, March or April should refer to HUD guidance found in HH 4350.3 R1, C4, Paragraph 9-6. 

"The owner must use one of the methods below for determining the tenant's income.

  1. Use the benefit information reported in EIV that does not include the COLA
  2. Use the 2017 SSA benefit, award letter or Proof of Income Letter provided by the tenant that includes the COLA adjustment if the date of the letter is within 120 days from the date of receipt by the owner; 
  3. Determine the tenant's income by applying the COLA increase percentage to the current verified benefit amount and document the tenant file with how the tenant's income was determined; (Note from Mary:  If your calculation results in a number that includes cents, do not round up or down; use the cents when projecting annual income)  or    
  4. Request third party verification directly from SSA when the income in EIV does not agree with the income the tenant reports he/she is receiving.

All recertifications effective after April 1 must reflect the SSA benefit that includes the COLA."

If certifications have already been completed, owner/agents DO NOT have to go back and create an interim certification unless the total household income has increased by $200.00 or more per month.  See HH 4350.3 R1, C4, Paragraph 7-11.

"If a tenant reports a change in income that does not increase the household's cumulative income by $200 or more a month, the owner should not process an interim recertification to increase the tenant's rent.  If a tenant reports any other change addressed above along with an increase in income that does not increase the household's cumulative income by $200 or more a month, the owner should not include the increase in income in processing the interim recertification."

For verification purposes, please note that in December 2016, EIV was updated to reflect the COLA increase. 

We have noticed that, when utilizing EIV to verify the Medicare expense, many residents now show a premium of $0.00.

If this is the case, yet your resident states that the Medicare Part B premium is deducted from their Social Security award, you may have to use an alternative method to determine the medical expense when Medicare premium information is not available in EIV.

Currently, owner/agents may accept the award letter issued in November 2016, which reflects the Medicare premium.  The award letter may not be more than 120 days old when the OA receives the award letter and the award letter must be used within 120 days of receipt. 

A word of caution, though; several state agencies have advised us that they will no longer accept the award letter issued at the end of the year because these letters are not dated.  It is a good idea to check with your state agency.

Residents can request a new copy of their award letter by calling the Social Security Administration toll free at 1-800-772-1213 (TTY-800-325-0778). Residents may also obtain a statement online at

Keep in mind, since the publication of the Streamlining Final Rule (effective April 7, 2016), owner/agents may also use the Streamlining Income Determination (verification) method.  This means you can use last year's verification method (usually an award letter when EIV is not available) and just apply the .03% increase.  If you use the Streamlining method, attach last year's award letter (from the resident file) and a printout from SSA showing the COLA increase for 2017.  You can refer to the HUDBlast archives and read the HUDBlast issued October 20, 2016 for more information.

Owner/agents may use the prior year medical expense to project the medical expense for 2017.  Residents may also obtain verification information directly from Medicare by signing up for My Medicare at