GN 02330.090 Tolerance Amount
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.
John Dough is paying $45 per month for Premium-HI and $8.60 for SMI (including a 20% premium increase). He received an incorrect refund of $45.
The tolerance is $25.80 (3 times his SMI premium). Since the amount of the erroneous refund is greater than the tolerance amount, SSA must notify Mr. Dough that he owes $45, and inform him of his right to request relief from repayment of the erroneously refunded amount.
Alice Johnson pays $7.40 for SMI (including a 10% premium increase). She received an incorrect refund of $14.80.
The tolerance in this case is $22.20 (3 times her 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.