For example, a town accepts the local option law (Section 18, Chapter 32B), which requires its Medicare eligible retirees to enroll in the federal program and a supplement plan (i.e., Medex). A town retiree, who must enroll in Medicare and possibly Medex, may find himself paying his first Part B premium (now $54 monthly) at age 67.

Because he's two years over the threshold (65), the retiree faces a federal penalty of $10.80 (or 20% of $54) and, therefore, would be paying $64.80 for Part B, but not $54. This retiree's 20% penalty would not remain fixed at $10.80, but would increase according to any raise in the Part B premium over time.

Fortunately the same state law (Section 18), which allows a town to transfer its Medicare eligible retirees into that program, also requires it to pick up any Part B penalty caused by its decision. "And it's always been our position that the town remains totally responsible for any increase in that penalty over time," comments Insurance Coordinator Cheryl Stillman.

And here's where we take issue with the position taken by the town of Wakefield. From our members living in the town, we have learned that Wakefield has taken the position that it is not responsible for any increases in the penalty over time but only for the original amount of the penalty, leaving the retiree to pay any additional amount in future years.

"I must admit that we were somewhat surprised to learn that Wakefield had implemented such a practice," states Stillman. "Without getting too technical, we believe that the language in the law, on which Wakefield relies for its position, does not limit the amount of the penalty it must pay, but simply defines under what circumstances a town becomes responsible for the penalty."

It is noteworthy that the state group insurance law (Section 18, Chapter 32A) contains language identical to that cited by Wakefield in support of its position. According to state officials at the Group Insurance Commission (GIC), which administers Chapter 32A, the Commonwealth is responsible for the entire Part B penalty assessed against a retiree, affected by Section 18, in subsequent years and not just the original amount.

"They (GIC) agree with our position that the town remains responsible for the entire penalty, and with that in hand, we have contacted Wakefield officials, requesting they reconsider their position," reports Stillman. "We're assuming that this is an isolated case.

"But if you think you're paying any part of the Medicare Part B penalty, then we suggest you contact your local officials in charge - usually someone in the town's personnel office and not the retiremnet board - to check it out. Please call me if you have any problems."