Accounting
Medicare basics for accountants: Key considerations for advising clients
Navigating Medicare can be a complex task for retirees, and accountants play a crucial role in guiding their clients through this essential aspect of retirement planning. This article aims to provide accountants with a comprehensive overview of Medicare, covering eligibility, enrollment periods, and the various parts (A, B, C, and D). We will also highlight critical considerations accountants should consider when advising clients, offering practical advice and strategies to help clients make informed decisions.
Understanding Medicare eligibility
Medicare is a federal program providing health insurance primarily to individuals aged 65 and older. However, it also covers younger individuals with disabilities or specific conditions like End-Stage Renal Disease and Amyotrophic Lateral Sclerosis. Eligibility is typically based on work history and Social Security benefits, with most beneficiaries paying Medicare taxes during their working years.
Enrollment periods
Enrolling in Medicare at the right time is crucial to avoid penalties and ensure continuous coverage. Here are the key enrollment periods accountants should be aware of:
- Initial enrollment period: This seven-month period begins three months before a client’s 65th birthday, includes their birth month, and ends three months after. Enrolling during this period ensures timely coverage.
- General enrollment period: If clients miss their IEP, they can enroll during the GEP from January 1 to March 31 each year, with coverage starting on July 1. However, late enrollment penalties may apply.
- Special enrollment periods: Certain life events, such as losing employer coverage or moving out of a plan’s service area, allow clients to enroll outside the standard periods without penalties.
- Late enrollment penalties: Delaying enrollment can result in higher premiums for Part B and Part D. It’s essential to advise clients to enroll on time to avoid these costs.
Breakdown of Medicare parts
Medicare is divided into four parts, each covering different aspects of healthcare:
- Part A (hospital insurance): This covers inpatient hospital stays, skilled nursing facility care, hospice, and some home health services. Most people don’t pay a premium for Part A if they or their spouse paid Medicare taxes for at least 10 years.
- Part B (medical insurance): This covers outpatient care, preventive services, ambulance services, and medical equipment. Part B requires a monthly premium, which can vary based on income.
- Part C (Medicare Advantage): Offered by private companies, these plans provide all Part A and Part B benefits and often include additional services like vision, dental and hearing. Premiums and coverage details vary by plan.
- Part D (prescription drug coverage): This plan helps cover the cost of prescription drugs. Clients must choose a stand-alone Part D plan or a Medicare Advantage plan with drug coverage. Premiums and formularies (list of covered drugs) differ among plans.
Key considerations for accountants
Accountants should consider several factors when advising clients about Medicare:
- Timing of enrollment: Proper timing can optimize benefits and avoid penalties. Encourage clients to mark their calendars and plan ahead.
- Financial implications: Understanding the costs associated with each Medicare part, including premiums, deductibles, and co-insurance, is vital for budgeting.
- Medigap (supplemental) policies: These policies can help cover out-of-pocket costs not covered by original Medicare. Evaluate the need for these plans based on the client’s health care needs and financial situation.
- Tax implications: Medicare premiums and other health care costs can have tax implications. Be aware of deductions and credits that may apply.
- Comprehensive retirement planning: Integrate Medicare planning into broader retirement strategies, considering healthcare costs a significant factor in retirement budgets.
Practical advice and strategies
Here are some practical steps to help clients navigate Medicare:
- Step-by-step guidance: Walk clients through the enrollment process, explaining each step and necessary documents.
- Clear communication: Use plain language to explain complex terms and ensure clients understand their options.
- Resource utilization: Leverage tools and resources such as the
Medicare.gov website, helplines, and seminars to stay updated on changes and provide accurate information. - Personalized advice: Tailor your advice to each client’s specific circumstances, considering their health needs, financial situation, and retirement goals.
Conclusion
Medicare is a critical component of retirement planning, and accountants have a significant role in helping clients make informed decisions. Accountants can provide valuable advisory services by understanding the basics of Medicare, including eligibility, enrollment periods, and the various parts.
Integrating Medicare planning into comprehensive retirement strategies ensures clients are well-prepared for the health care aspects of their retirement years. Proactive engagement and personalized advice can substantially impact clients’ financial and overall well-being.
Aprio, a Top 25 Firm based in Atlanta, has acquired JMS Advisory Group, a firm that specializes in unclaimed property compliance and escheat process development, also based in Atlanta
Financial terms of the deal were not disclosed. Aprio ranked No. 24 on Accounting Today’s just released
JMS was founded in 2006 and helps clients mitigate risk and capitalize on opportunities through managed unclaimed property compliance. The team includes attorneys, CPAs, CFEs and others.
JMS has a wide range of clients, including enterprise companies, financial institutions, credit unions, insurance companies, hospitality and health care organizations.
“As Aprio continues its rapid growth, we are committed to expanding our services to meet the evolving needs of our clients,” said Aprio CEO Richard Kopelman in a statement Tuesday. “The addition of JMS gives us the opportunity to continue strengthening our position as a future-focused advisory firm. JMS’s focus on escheat management and asset recovery not only enhances our current capabilities but also allows us to deliver even more impactful solutions to help businesses navigate complex compliance challenges.”
JMS president and CEO James Santivanez is joining Aprio as a partner and provides guidance to clients on unclaimed property and state and local tax issues.
“We created JMS to make an impact nationally in the unclaimed property consulting industry, and I’m proud of our nearly 20-year history of helping clients mitigate risk and capitalize on opportunities resulting from accurate and properly managed unclaimed property compliance,” Santivanez said in a statement. “Joining with Aprio takes us to the next level, allowing us to build upon our success while providing even greater value to our clients. This is an exciting next step in our journey.”
JMS founder and director Sherridan Santivanez is also joining Aprio as a partner. He specializes in representing clients before state enforcement authorities and managing complex audits and voluntary disclosures for some of the world’s largest companies. She provides strategic guidance on audit preparation and navigates interactions with state and third-party auditors.
Aprio received a
The American Institute of CPAs and the National Association of State Boards of Accountancy are asking for comments on their proposal for an additional pathway to CPA licensure through
The AICPA and NASBA proposed the
The UAA changes would:
- Enable states to adopt a third licensure pathway that requires earning a baccalaureate degree with an accounting concentration, completing two years of professional experience as defined by Board rule, and passing the Uniform CPA Examination;
- Shift to an “individual-based” mobility model, which allows CPAs to practice in other states with just one license; and
- Add safe harbor language to ensure CPAs who meet existing licensure requirements preserve practice privileges.
The proposals come as several states are already moving forward with their own changes, including
The updates reflect feedback gathered during a late 2024 exposure draft period and forward-looking solutions being advanced by state CPA societies and boards of accountancy to increase flexibility for licensure candidates while maintaining the integrity of the CPA license.
The AICPA and NASBA are asking for comments on the proposed changes by May 3, 2025. They can be submitted through this
The UAA offers state legislatures and boards of accountancy a national model they can adopt in full or in part to meet the licensure needs of each jurisdiction.
The proposal would maintain the current two pathways to CPA licensure:
- Earning a post baccalaureate degree with an accounting concentration, completing one year of professional experience as defined by Board rule, and passing the CPA exam; and,
- Earning a baccalaureate degree with an accounting concentration, plus an additional 30 semester credit hours , completing one year of professional experience as defined by Board rule, and passing the CPA exam.
Small business employment held steady last month, according to payroll company Paychex, while wage growth continued below 3%
The
“Our employment data continues to show moderate job growth and wage growth below three percent,” said Paychex president and CEO John Gibson in a statement Tuesday. “The consistent long-term trend we’re seeing is a small business labor market that is resilient and stable with little job movement among workers. At the same time, small business owners are optimistic about future business conditions despite uncertainty about how to adapt to a rapidly evolving legislative and regulatory landscape.”
The Midwest remained the top region in the country for the ninth consecutive month with a jobs index level of 100.54. Seven of the 20 states analyzed gained more than one percentage point in February, led by Texas (up 2.11 percentage points).
Phoenix (101.92) increased its rate of small business job growth for the fourth month in a row in February to rank first among the largest U.S. metros.
Construction (3.29%) regained its top spot among industries in terms of hourly earnings growth in February, followed closely by “other services” (3.27%) and manufacturing (3.21%).
The pace of job growth in manufacturing gained 2.39 percentage points to 99.52 in February, the industry’s biggest one-month increase since April 2021.
China has room to act on fiscal policy amid uncertainties, finance minister says
China doubles down on AI and tech as Trump ratchets up trade pressure
Stocks making the biggest moves after hours: MRVL, MDB, ZS
New 2023 K-1 instructions stir the CAMT pot for partnerships and corporations
The Essential Practice of Bank and Credit Card Statement Reconciliation
Are American progressives making themselves sad?
-
Economics1 week agoElon Musk’s outfit is running into opposition from Donald Trump’s appointees
-
Personal Finance1 week agoHere’s how to qualify for the retirement savings contributions credit
-
Personal Finance1 week agoWhat to know about selecting health plans
-
Personal Finance1 week agoThe average IRS tax refund is 32.4% lower this season. Here’s why
-
Economics6 days agoThe first quarter is on track for negative GDP growth, Atlanta Fed indicator says
-
Economics6 days agoPCE inflation January 2025:
-
Economics7 days agoFederal job cuts disrupt retirement picture for workers, including Black Americans
-
Accounting1 week agoDeloitte China appoints first local female as CEO