When the beneficiary's benefit payments are suspended for a period of time, which will not permit collection of all premiums due from benefits for the current year, the beneficiary will be billed and expected to pay the premiums by direct remittance. For billing instructions if SMI entitlement is initially awarded after the year in which coverage begins.) When an individual goes from suspense status to deferred status (i.e., a definite date is set for resumption of benefits), premium billing continues until benefit payments actually begin. When benefit payments are resumed following a period of deferred status, any premiums owed are deducted from the first benefit(s) payable (e.g., where the enrollee has not remitted all premiums timely in response to direct billing).

Beneficiaries in suspense for an extended period are billed for 3 months' premiums at a time on a regular quarterly cycle beginning with the first, second, or third months of the calendar quarter, as explained below.

The billing notices are mailed in the month preceding the quarter. However, the enrollee may pay premiums for more than one quarter at a time. When a beneficiary pays their premiums in advance, the direct billing system will not send a bill until the premium liability exceeds $10.00.

If a beneficiary sends a payment that is less than what was billed, such payments will be accepted. If the payment received is less than the amount billed and the notice received was a delinquent notice, a termination will still occur if the remaining premium liability is more than $10.00.

When the beneficiary's payments are deferred, i.e., a definite date is set for resumption of benefits, premium billing will occur if the deferred date is not in the current year. If the deferred date is in the current year, any premiums owed will be deducted from the first benefit check(s) payable when the benefit payments are resumed.

Uninsured beneficiaries and beneficiaries who are in suspense status are billed in three quarterly billing cycles for their SMI premiums. The cycles are divided equally to better manage the direct billing process. These quarterly billing cycles are identified as A, B, and C. The chart below indicates the months in which the billing notices are mailed for each cycle. Bills mailed in the months displayed will include premiums for the subsequent 3-month period:

Example: A bill mailed in July will include premiums for August, September and October. The next bill for this cycle will be mailed in October for the subsequent 3 months.

A monthly beneficiary entering into billable status upon suspension of benefit payment is placed in the first billing cycle feasible following the actual suspension of payments. The beneficiary will remain in this billing cycle as long as they are in billable status. However, if the beneficiary finds that their billing cycle is financially inconvenient, and the beneficiary makes a specific request, the cycle may be changed to monthly billing. (See HI 01001.075.) It is not necessary to routinely volunteer information about changing billing cycles since monthly billing is a more expensive process.

Example: Fothemiller, a monthly benefit beneficiary, has their benefit check suspended in 7/00 and owes premiums for months beginning in August. Fothemiller is placed in billing cycle B and in August is billed for 4 months of premiums (August through November). After the initial bill, Fothemiller will be routinely billed for 3 months' premiums and any arrearages if applicable, in November, February, and May.

When suspended benefit payments are scheduled to be resumed (e.g., a deferred case) for the current year with payments beginning in or before the following January, any premiums owed when benefits are resumed will be deducted from the first benefit(s) payable. In the meantime, the beneficiary is not billed but instead is advised that premiums due during the period for which benefits are suspended will be deducted from the beneficiary's benefit payments when their benefits resume.

Beneficiaries whose benefits are in suspense or in deferred payment status beyond the end of the current year are billed (see HI 01001.045A.).

Example: Frana Johnson, a 68-year-old beneficiary, is enrolled for SMI and has been in continuous work suspense status. In April, after having paid Frana's premiums for April through June, Frana informed notified SSA of retiring in May and would have no further earnings.

Since Frana premiums were paid through June, the benefit check Frana receives in June will not be reduced; however, each benefit check beginning with the July check will have one month's premium deducted from it. If, at the time Frana's June check is issued, and Frana has not paid premiums for the April through June quarter or Frana's record did not indicate such payment, Frana's benefit check would be reduced by the premiums for April through June. If, after the check is issued, Frana's record is credited with a payment made in response to receipt of the Notice of Medicare Premium Payment Due (CMS-500), there would be a premium overpayment, which would be refunded in the next direct billing quarterly refund process.

Frana Johnson notified SSA in June of returning back to work in August. Any premium overpayment that existed would not be refunded at that time because a current pay status would not be reflected until August.

Unless the enrollee is billed monthly, the initial notice of premiums due will cover a period of 3 months or, if greater, the period from the first month a premium is owed through the end of the third month after the month of billing. Premium billing notices are not necessarily received on a calendar quarter billing cycle. Some notices are mailed on an off-calendar quarter; e.g., February, March. The enrollee should be advised to set aside money for premiums, so that the enrollee will be prepared to pay for each month of coverage before they receive the bill plus the quarter after the bill. (HI 01005.803 further explains the methods of premium collection.)