how cola is determined
cola is reliant on two components the cpi w and the employer contracted cola percentage cpi determines the rate of inflation and is compared yearly recipients don t receive a cola when consumer prices drop or if inflation hasn t been high enough to substantiate a cola increase there s no cola increase if there s no cpi w increase 7the hold harmless provision in the social security act prevents the benefit amount for some social security beneficiaries from decreasing from one year to the next if there s an increase in their standard medicare part b premiums the part b premium will be reduced to ensure that the nominal value of the social security benefit will be the same if the increase in part b premiums causes the beneficiaries social security amount to be less few individuals are typically held harmless but they may be impacted by this provision in years where there s no social security cola there was a 2 social security cola in 2018 and 28 of part b enrollees were held harmless there was virtually no cola in 2016 and 70 of enrollees were held harmless from the part b premium increase 8other types of colassome employers such as the u s military occasionally give a temporary cola to employees who are required to perform work assignments in cities with a higher cost of living than their home city this cola expires when the work assignment is completed 9