Neither CMS nor SSA will seek out particular group for the purpose of arranging group payment of SMI premiums. Any action to pay premiums on behalf of groups of enrollees must be voluntary on the part of the payer, as such group collection must be gratuitous; i.e., without expectation of reimbursement from CMS, SSA or the enrollee for the service of making premium payments or for the administrative costs thereof.

Requests for a group premium billing arrangement should be sent for approval to CMS, Bureau of Program Operations, Office of Methods and Systems, Division of Eligibility Systems. That office determines whether a group billing arrangement is appropriate and informs the group about the determination. A copy of the letter will be sent to the DO.

Premiums can be accepted only for persons who are already enrolled for SMI and who are billed for their premiums. This does not include persons entitled to cash monthly benefits under the Social Security, Railroad Retirement, or Civil Service Retirement Acts, if they are actually receiving such benefits; premiums for such beneficiary enrollees must be deducted from these benefits, or paid under a State buy-in agreement.

Normally, the group must include a substantial number of enrollees who would otherwise be billed individually. The group billing arrangement will only be approved if it would be economically feasible for CMS to bill the group or if the group billing would serve a social security or Medicare program purpose.

When a union, employer, or other “payer” does not wish to establish a group arrangement, premiums can be paid in another manner. The payer can advise enrollees in the group to turn their quarterly punchcard notices over to the payer as soon as received, and payment can then be made on their behalf. The payer should mail promptly all the notices in a single package to the nearest SSA program service center with a check for the correct total amount of the premiums due. An exception is necessary if the payment covers any billing notices originating from RRB. These notices would have to be sent with a separate remittance to RRB. Promptness in payment is essential, since an enrollee's SMI coverage must be terminated if their SMI premium is not paid by the end of the grace period.

The rights of the enrollee must be protected. The enrollee's right to enroll or not to enroll, or to terminate once enrolled, their right to pay premiums for themselves if they desire, their right to notice of delinquency or of any action affecting their SMI benefits, and the enrollee's right to confidentiality, must not be jeopardized in any way by a group billing and payment arrangement. To assure that these rights are protected to the maximum degree feasible, the group payer may not be billed on behalf of an enrollee without written authorization by the enrollee. Such authorization will permit CMS to send bills and the minimum of information necessary for group payment directly to the group payer.

This signed authorization will be sent to BSS except where the group payer is an entity of the State or local government. (See HI 01001.250.) Where the group payer is an entity of a State or local government, that entity maintains the authorization on file and certifies to CMS that it has an authorization on file for each enrollee participating in its group-payment arrangement. Where enrollees regularly turn over their billing notices to group payers, no such authorization is necessary.

It is essential that any group payer organization pay premiums promptly. Generally, group payers will be expected to make their payments by the due date for such payments, or at least in the first month for which the premium is payable. This policy will avoid infringing on the grace period during which premiums may be paid by the enrollee in the event they are dropped from the group arrangement, and will enhance the integrity of the trust fund by collecting all premiums when due. When premiums are not paid timely, both the group payer and the enrollee will be notified of the delinquency.

Any payment by a group payer is considered a payment by the enrollee. Once paid, premiums will not be refunded, except (1) premiums paid for a month after the end of the enrollee's SMI coverage (e.g., premiums paid for months after the month of their death), or (2) premiums paid by a group payer for any months after the month in which the payer has claimed refund and given notice by the 25th of the month that the enrollee is no longer eligible for group payment. Such excess premiums when paid by a group will be refunded to the group, except in the rare situation where we have information clearly showing that the payment was made from an enrollee's funds, in which event the unearned premiums will be refunded to the enrollee or a representative of their estate.

Example:

Fran Smoot is the spouse of Joe Smoot, a retiree of Corporation X, which pays premiums on behalf of all its retirees and their dependents. Fran obtains a divorce on 10/20/76 and thus disqualifies Fran for further premium payments by the Corporation. The Corporation gives notice on 11/10/ 76 that a refund is due because Fran Smoot has been dropped from the list of persons for whom it has agreed to pay premiums. The premium paid for 12/76 would be refunded to the group.

Premium payments must be made in a way which assures that they can be credited to the enrollee's account quickly, correctly, and inexpensively. Unidentified or incorrectly identified payments may result in improper termination of coverage for some enrollees. Identification must be in a form which lends itself to inexpensive handling. Otherwise, a substantial part of the low premiums would be sent on administration rather than on medical care costs.