Thousands of public sector workers who are beneficiaries of Social Security will soon notice an increase to their monthly benefit amount. The benefit of this cohort has been adjusted to the full amount that they should have been entitled to as a result of a new law called the Social Security Fairness Act being signed into effect.
What is the Social Security Fairness Act?
Up until very recently, many public sector workers such as teachers, firefighters, civil servants, federal employees, or railroad employees, have been subject to a rule that caused their Social Security benefits to be reduced and sometimes even eliminated because their employees were providing different pensions.
In January, as one of his final acts in office, former President Joe Biden signed the Social Security Fairness Act into law and as a result, the aforementioned workers will now have their full benefits retroactively restored to them, dating back to January 2024.
Subsequently, around 2.8 million beneficiaries of Social Security — both first time beneficiaries and long time ones — will be welcoming an increased benefit amount to their accounts each month, thanks to the Fairness Act. Furthermore, beneficiaries who do not qualify for the increase under the new act can still benefit from its effects with regards to how their Medicare premiums are paid, as well as the amount of their monthly premiums.
How will the Fairness Act impact Medicare premiums?
Initially, retirees would have to send in their Medicare premium checks directly. Social Security beneficiaries, on the other hand, had their Medicare premiums deducted from their benefit check automatically each month. Now, with the Social Security Fairness Act in full effect, those who will now be covered by Social Security but previously had to pay for Medicare premiums independently, will also have their Medicare premium automatically deducted from their monthly benefit.
However, the Social Security Administration advises that if a beneficiary is currently paying their Medicare premiums directly to the Centers for Medicare & Medicaid Services, they should continue to do so according to the instructions on their bill. When the beneficiary’s account has been updated, the SSA will send them a notice stating so. Once a beneficiary receives this notice, their premium amounts will be deducted automatically from their benefit amount.
Additionally, those who had prepaid their premiums to the Centers for Medicare & Medicaid Services will potentially be owed a refund as soon as the automatic payments go into effect. In the event of this, the SSA will return to you what you are owed.
For those who pay their premiums via Medicare Easy Pay or via online bill payments, the SSA advises you to do the following once you have been notified of the automated payments:
- For Medicare Easy Pay: complete the Authorization Agreement for Preauthorized Payments form (SF-5510) to stop the payments.
- For paying via online bill payment, log in to your bank’s online banking or contact the bank to stop the payments.
Medicare premium increase
These Social Security benefit changes could also result in the premiums you pay for Medicare Part B and Part D being triggered by an Income-Related Monthly Adjustment Amount (IRMAA).This is because the premium amount is determined in relation to your modified adjusted gross income (MAGI), meaning that the premium could increase when your Social Security benefit increases under the Fairness Act.
The standard premium of $185 in 2025 is paid by most beneficiaries, covering 25% of the cost of Parts B and D — with the remainder subsidized by the government. However, for higher earners and depending on their MAGI, a larger share of 35%-85% is paid.
For 2025, high income earners are those with a MAGI of “$106,000, or more than $212,000 for married joint filers.” It should be noted that Medicare uses your MAGI from IRS tax returns two years prior to its premium calculations. As such, you will only likely see an increased premium in 2026 as a result of your 2024 tax return.
Additionally, your IRMAA could be reduced in the case of a life-changing event such as,” a marriage, divorce, death of a spouse or income loss, or you’ve filed an amended tax return showing less income.” In such a case, contact Medicare on 800-772-1213 and tell the representative that you wish to lower your IRMAA.