TN 3 (02-95)

GN 01703.500 Totalization and HI/SMI Entitlement

A. Policy

1. RSDI beneficiary

Section 233 of the Act prohibits the use of foreign coverage to establish entitlement to free HI. Therefore, in most cases a retirement or survivor beneficiary who would be eligible for free HI based on eligibility for regular RSI benefits will not be eligible for free HI if insured status is met based only on the inclusion of foreign periods of coverage.

Similarly, there is no free HI entitlement after 24 months of totalization disability entitlement. Also, there is no premium HI eligibility for totalization disability beneficiaries since a person must be 65 years old and entitled to SMI to qualify for premium HI. See HI 00801.131 for a discussion of premium HI.

Many totalization beneficiaries can have HI coverage only if they meet the U.S. residence and U.S. citizenship or lawfully admitted alien requirements which are contained in HI 00805.005.

If a worker becomes insured based on U.S. QCs only, free HI entitlement for the worker and any auxiliaries begins:

  • at age 65 or the first month after age 65 that the worker is insured based on U.S. QCs only for retirement benefits, or

  • at 24 months of entitlement to disability or the first month after 24 months that the worker is insured based on U.S. QCs only.

SMI entitlement, if elected, begins during the IEP or the next GEP. See HI 00805.005 for specific details concerning the month of entitlement to SMI.

2. Childhood

If a parent is entitled to totalization benefits, a CDB is not eligible for HI or SMI after 24 months of entitlement. However, if a parent of a CDB becomes entitled to a nontotalization benefit, the CDB will become entitled to HI (and SMI, if applicable) effective with the 24th month after the month the parent acquires insured status based only on U.S. coverage.

Note: In these situations, the date of entitlement for disability will be changed to reflect the first month the worker is insured without foreign coverage. The factor analysis code (FAC) DM and related entries will be shown on the amended award form. See T2PE 009.001.

Example: Mark Brown became entitled to DIB 01/90 based on a date of onset of 07/11/89. Foreign coverage was required to meet the insured status requirement. Mr. Brown's daughter, Mary, also became entitled as a CDB in 01/90. Effective 04/90, Mr. Brown is insured based only on U.S. coverage. Both Mr. Brown and Mary will be entitled to HI (and eligible for SMI) effective 04/92.

B. Process - HI entitlement

A TSC code of A1 on the MBR prevents automatic HI enrollment of any entitled wage earner who does not meet the insured status requirements based only on U.S. coverage or any totalization beneficiary who is entitled on the record of such a wage earner. Establishing entitlement to HI for a beneficiary entitled on an earnings record with a TSC of A1 requires a determination by a claims authorizer except where the beneficiary is also entitled to a nontotalization benefit. See GN 01701.140for possibilities for HI entitlement for totalization beneficiaries.

The PEPPER program produces alerts for beneficiaries with a TSC of A1. These alerts are generated at age 64 years and 6 months and every month thereafter until an action is taken. The PEPPER program cannot determine whether a totalization beneficiary is eligible for HI/SMI. Thus, it alerts the case for a manual review. These alerts, identified as “Totalization Case - Man Act Nec (Code 64)” are initially the responsibility of the EIE in the totalization modules.

C. Procedure - initial award

Claims Authorizer -Follow this procedure when awarding totalization benefits.

1. Claimant under age 65 or entitled to disability benefits for less than 23 months

If the claimant is under age 65 or entitled to disability benefits for less than 23 moths:

  1. prepare an SSA-101-U3 award.

  2. inform the claimant that he/she will not be eligible for free HI because foreign coverage was used to establish insured status.

  3. inform the claimant that he/she will not be automatically enrolled in supplemental medical insurance (SMI) when he/she attains age 65, but must file an application within an enrollment period.

  4. refer to GN 01701.140 for alternate ways a claimant may establish HI entitlement.

  5. inform a disabled beneficiary that he/she cannot be entitled to premium HI because a worker must have attained age 65 and be entitled to SMI to be entitled to premium HI.

2. Claimant within 2 months of age 65 or older or entitled to disability benefits for 23 months or more

If the claimant is within 2 months of age 65 or older or entitled to disability benefits for 23 months or more:

  1. Prepare an SSA-101-U3 award.

  2. Consider the following alternatives for HI entitlement:

  3. Enroll the claimant for HI if he/she meets the criteria for any of the above alternatives.

  4. If not, inform the claimant that he/she is not eligible for free HI because foreign coverage was used to establish insured status.

    NOTE: Beneficiaries within 3 months of age 65 at the time of filing should have made their SMI election at the time of filing.

  5. Enroll the claimant for SMI if he/she elected coverage and meets the criteria for SMI entitlement. (See HI 00805.005 for these criteria.)

D. Process - pepper alerts

When a totalization beneficiary nears age 65 or the 24th month of disability entitlement, a PEPPER alert is generated. These alerts are sent to the PETLs in the totalization modules. The Postentitlement Team Leaders (PETLs) refer the appropriate alerts to the Exceptions and Inquiry Examiner (EIE.)

E. Procedure - pepper alert

The Exceptions and Inquiry Examiner and Claims Authorizer - Follow the instructions below.

1. The Exceptions and Inquiry Examiner (EIE)

EIE:

If the totalization beneficiary is entitled to:

  1. no other benefit and lives in the U.S.

    • code a SOC of R, HOC of H, BCF SP, ENC. N* and summary line on the MBR

    • send an SSA-559 to the CA to develop the SMI election

  2. no other benefit and lives outside the U.S.

    • make the determination that beneficiary is not eligible for HI/SMI unless one of the situations described in A. above applies.

    • code a SOC of R, HOC of H, BCF SP, and show N.* and summary line.

  3. a nontotalization benefit also and lives in the U.S.

    • code a SOC of B, HOC of E, a DOEH, and A DOES (see SM 00805.300) along with the cross-reference account number (XRAN) and XRAN BIC.

    • code a SOC of Y if the claimant is 64 years and 11 months older. This coding which will establish HI entitlement results in automatic SMI enrollment and generates a notice of the right to refuse SMI. It should not be done earlier than 2 months prior to age 65.

  4. a nontotalization benefit also and lives outside the U.S.

    • code XRAN and XRAN BIC, ENC D if a notice is sent, otherwise code an N.*, SOC of R, HOC of E, DOEH, and BCF SP.

    • send the case to the CA to determine if the beneficiary who is entitled to HI (at age 65) based on entitlement to the nontotalization benefit wishes to enroll in SMI.

  5. another totalization benefit and lives in or outside the U.S., code a SOC of R, HOC of H, ENC N.* and summary line, and BCF SP.

  6. disability benefit including DAC and DWB and lives in or outside the U.S., code a HOC of H, and SOC of N.

    • If this coding is already on the MBR of the claimant for whom a PEPPER alert is received, check the age of the beneficiary.

    • If age 65 attainment is approaching, follow the instructions for processing totalization claims for which no entitlement to a benefit based only on U.S. coverage exists (lives in or outside the U.S).

  7. no other benefit but is covered under the RRB and lives in or outside the U.S., code a HOC of H and the applicable SOC (R or P) regardless of prior entitlement to HI/SMI at the RRB.

    REMEMBER: Code HI/SMI data no more than two months before the claimant's attainment of age 65. Be careful not to code this data too early as the system will not accept it.

2. Claims authorizer

Claims Authorizer:

  1. Determine if the totalization beneficiary is eligible for SMI and premium HI based on U.S. residence and U.S. citizenship or lawfully admitted alien status. See HI 00630.020 and HI 00805.005 for specific requirements and instructions. Remember that forms referred to in those references must be mailed.

  2. Obtain a HCFA-18, HCFA-4040 (formerly SSA-40A) or equivalent information to establish entitlement.

  3. Prepare an SSA-101-U3 to document the claims folder if the beneficiary establishes entitlement to SMI.

  4. Be alert for possible entitlement as a QRRB, ESRD, or MQGE and make the HI/SMI determination. See C. above for references.

F. Procedure - insured status established without foreign coverage

CAs - Follow this procedure when a totalization beneficiary becomes insured based on U.S. coverage only.

1. Beneficiary under age 65 or entitled to disability benefits for less than 23 months

If the beneficiary is under age 65 or entitled to disability for less than 23 months:

  1. Prepare an amended award (SSA-101-U3).

  2. Inform the worker he/she will be automatically entitled to free HI effective the first month he/she attains age 65 or for disabled workers, the 24th month after the month he/she attains insured status based only on U.S. coverage

  3. Inform the worker and any auxiliaries entitled to benefits on the record that they will become eligible for SMI based on their entitlement to HI.

  4. Change the TSC code from A1 or A3 to E2 or T1. (See GN 01703.230 for TSC codes.)

  5. Prepare a diary for age 65 or the 24th month of disability to develop SMI election if the worker or auxiliary is outside the U.S.

2. Beneficiary within 2 months of age 65 or older or entitled to disability benefits for 23 or more months

If the beneficiary is within 2 months of age 65 or older or entitled to disability benefits for 23 or more months:

  1. Prepare an amended award (SSA-101-U3).

  2. Show HI/SMI entitlement data in items 7 and 11 of the SSA-101. See SM 00850.300ff for proper coding of HI/SMI.

  3. Change the TSC code from A1 or A2 to E2 or T1. (See GN 01703.230 for TSC codes.)

  4. Obtain a HCFA-18 or HCFA-4040 to request SMI enrollment. Tell the beneficiary to return this development to the module or PSC that now has jurisdiction. If the enrollment request is filed after the beneficiary's initial enrollment period and not during a general enrollment period (GEP), determine that the enrollment request is deemed to have been filed during the GEP.

    Note: If the worker becomes insured before an auxiliary attains age 65, the auxiliary (if still entitled) will be eligible for SMI upon attainment of age 65, and if he/she is a U.S. resident, he/she will be subject to automatic enrollment. However, if a worker becomes insured based on U.S. coverage in an auxiliary's month of attainment of age 65 or later, the auxiliary must file a request for SMI enrollment. Obtain an HCFA-18, HCFA-4040 or equivalent information in order to determine the auxiliary's first month of eligibility for SMI, and thus the date of entitlement to SMI and premium amount. Consider an auxiliary or survivor's possible entitlement to HI based on the wor