U.S. government employees have a separate retirement system from private-sector employees. As a result, Social Security and Medicare taxes are different. The government workers who don’t contribute Social Security taxes must still pay Medicare taxes, so their wages are Medical Qualified Government Wages. We’re here to help you understand the basics of what it means to be a Medicare Qualified Government Employee (MQGE).
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What is a Medicare Qualified Government Employee?
Further, you must take Medicare if you were hired or rehired after March 31, 1986. If you’re a federal employee hired before that date, you’re not an MQGE. Instead, you’re covered under FICA‘s Section 218 agreement, meaning you don’t need to take Medicare or pay Social Security or Medicare taxes if you’re part of a public retirement system.
Like other Medicare beneficiaries, MQGEs won’t have to pay a monthly premium for Part A if they’ve worked at least 40 quarters. Yet, if they work between 30 and 40 quarters, they’ll have to pay a partial premium, and a full premium if they’ve worked fewer than 30 quarters. Once you’ve determined how many quarters you’ve worked, you can calculate your estimated monthly premiums and find out if you qualify for Medicare. MQGEs also need to pay the standard monthly Part B premium to receive outpatient coverage.
Standard Wages for Medicare Qualified Government Employees
Wages vary for federal jobs. The U.S. Bureau of Labor Statistics reports salaries for federal workers to range between $26,130 and $221,090. The average salary for a federal employee is approximately $64,685.
Occupations and Services Not Covered Under Medicare
Keep in mind that some employees don’t qualify as MQGEs. In these situations, the years you work may not count toward your 40 quarters. Some of the exceptions include:
- Election workers who make less than $1,500 annually
- Temporary employees – for example, emergency relief workers
- Work performed by an inmate or patient hired in an institution or hospital
Before you accept employment in one of these categories, ask your employer if your wages will count as Medicare Qualified Government Wages and if you’ll pay Medicare taxes.
Federal Employee Retirement Health Benefits
Government workers can enroll in both Medicare and Federal Employee Retirement Health Benefits. Each FEHB program is different, but they all cover inpatient and outpatient services, just like Medicare. There are many advantages to having both programs.