TN 3 (10-22)
AUDIENCE: RECOVR, BA, BATA, HIE, EHS, IES
In the interests of efficient administration, there is a tolerance amount, below which
SSA will not attempt to recover an incorrect premium refund because of the costs of
collection. Accordingly, if the incorrect refund does not exceed 3 months SMI premiums,
no recovery action should be taken under GN 02330.080 and GN 02330.085.
Example 1:
John Dough is paying $45 per month for Premium-HI and $8.60 for SMI (including a 20%
premium increase). John received an incorrect refund of $45.
The tolerance is $25.80 (3 times John's SMI premium). Since the amount of the erroneous
refund is greater than the tolerance amount, SSA must notify John that of owing $45,
and inform John of the right to request relief from repayment of the erroneously refunded
amount.
Example 2:
Alice Johnson pays $7.40 for SMI (including a 10% premium increase). Alice received
an incorrect refund of $14.80.
The tolerance in this case is $22.20 (3 times Alice's SMI premium). Since the amount
of the refund is less than the tolerance amount, SSA will not take any action to recover
it from the enrollee, but will adjust its records for the amount erroneously refunded
and remove any additional premium liability generated by the incorrect premium refund.