Carole Simms, employed at United Banking, Inc. since 7/85, has been on long term disability
since 1993. She was entitled to Part A effective 3/95, but refused Part B. Carole
was notified in 10/98 that effective 1/99, the LGHP would no longer pay primary to
Medicare. She received the employer letter indicating the months the plan paid primary
and the carrier certification. Carole did not enroll in SMI during the D-SEP which
was 1/99 through 7/99.
In February 2000, Carole applies for SMI and inquires about the D-SEP. She is told
that her D-SEP ended 7/31/99 and her application must be treated as a GEP enrollment.
However, all months the plan paid primary are excludable from the premium surcharge
calculation. Carole is assessed a premium surcharge of 10 percent since the months
the employer was not primary payer of benefits (January 1999 through March 2000, a
total of 15 months) are not excludable from the surcharge calculation.