For clients facing Social Security start-date decisions,the new Bipartisan Budget Act includes provisions with meaningfulimpact.

Now that President Obama has signed it the law, you may want tocommunicate these changes to affected clients.

1. Medicare Part D premium relief

The act provides Medicare Part D premium relief to the 30percent of Medicare beneficiaries who otherwise would haveexperienced a 52 percent premium hike starting in 2016. Tounderstand the complex reasons, see "Medicare Premium Tax on High-Income Households toRise in 2016."

For people age 65 and older, the potential for a sharp premiumhike was an incentive to start Social Security benefits in 2016,rather than wait and collect Delayed Retirement Credits.

By starting in 2016, participants would have premiums deductedfrom Social Security benefits and be “held harmless” against Part Bpremium increases.

This would have kept Part B premiums at $104.90 per month for2016, rather than having them increase to $159.30--a $54.40 permonth difference.

The Budget Act greatly reduced the difference by adding a $3surcharge to all Medicare Part B premiums, effective in 2016, andsetting the basic premium for those not held harmless at $120.

Thus, the premium difference for delaying the start of benefitsshrinks to just $15.10 per month ($123.00 - $107.90).

High-income medicare participants who currently pay Part Bpremiums in higher tiers also received the same premium relief on aproportionate basis.

2. Elimination of file-and-suspendoption

For individuals who are currently under age 62, the Budget Acteliminated the popular “file-and-suspend” option for claimingSocial Security benefits.

This option has allowed married couples to file for a worker’sbenefit at full retirement age, which allows the otherspouse to collect a spousal benefit on that record, and thenimmediately suspend the worker’s benefit to let it earn DelayedRetirement Credits.

Technically, the act extended “deemed filing” from fullretirement age to age 70.

It means that any filing for benefits from age 62 through 70 nowwill be deemed to be for both the worker and spousal benefit, withSocial Security paying the larger of the two.

Also: Beginning six months after enactment of the law, whenworkers suspend benefits, any benefits being received by spouses,divorced spouses or children on the same record will be suspendeduntil the worker restarts benefits.

These provisions are very controversial. Some commentators saythey represent a positive step forward in eliminating loopholes andshoring up Social Security’sfunding.

Others argue that they will have a devastating impact on Social Securitybenefits.