HI 00820.115 Life Terminations for Aged Auxiliary Beneficiaries

When certain life terminations are processed for auxiliary beneficiaries who are 65 or over, HI entitlement normally terminates with the month of termination of monthly benefits. However, if current SMI entitlement exists (i.e., the SOC is “Y” or “G”), SMI entitlement continues on the terminated record indefinitely or until such time as a new award is processed or HI and/or SMI entitlement is transferred to another SSN. There are exceptions to this rule: If HI entitlement was originally established based on the renal disease provisions (i.e., the HENC is “K”), HI entitlement will continue even though monthly benefits terminate. If HI entitlement previously existed on the beneficiary's own SSN (BOAN), HI entitlement should be transferred immediately to the other record.

Where HI entitlement has never been established on the beneficiary's own SSN, it might be viewed as desirable to transfer existing SMI entitlement to the beneficiary's own SSN (i.e., establish an M claim). However, in many cases this is impossible because, although the beneficiary does not need to file and an M claim could be adjudicated by the Claims Authorizer, in many instances the beneficiary may not have an SSN or if there is an SSN, an earnings record is necessary to determine if eligibility to other benefits or free HI exists. It is imperative that SMI premium billing not be delayed while an M award is being adjudicated or another type of claim is being developed. Therefore, systems have been designed to allow SMI entitlement to continue on the terminated record until this coverage can be transferred to another record.

The information and instructions contained in this section pertain to terminations for reasons T-3, T-8, and T-9 where the DOST is later than the DOES and DOEH. The auxiliary must have health insurance entitlement on the terminated record for a period prior to the T-3, T-8, or T-9 termination. For example, a B has HI/SMI effective October 1978. Her benefits are being terminated reason T-3 beginning January 1980. Since she has had HI/SMI entitlement while being entitled to B benefits, she can maintain her SMI on the B claim number under these procedures. See SM 00850.490 for info on whether a new claim is required for T/M based on T3, T8, T9 life terminations and whether LAF U on the terminating record or T/M under claimant's own SSN is preferred.

The T3 category pertains to childhood disability beneficiaries over age 65 who marry non-beneficiaries and to B (any subscript) beneficiaries who obtain a divorce or annulment and does not include entitlement coversion situations such as a wife married for 10 or 20 years (depending on date of entitlement) who will be converted to a B6 or a D who remarries and will be converted to a D4. The T8 category applies only to B beneficiaries age 65 and over. The T9 category pertains only to auxiliary beneficiaries determined to be ineligible for RSI benefits and does not include “kill credit” actions or situations in which the individual dies before entitlement (The proper termination reason for death before entitlement is T1).

Terminations for reason T3 are processed by the SALT and MADCAP programs; T8 terminations are processed by the disability cessations portion of the Transfer, Attainments and Terminations (TATTER) program and by MADCAP; T9 terminations are processable only through MADCAP.

A. T3 Actions Processed Through SALT

The majority of T3 actions will be processed through the SALT program by the district offices. If current SMI entitlement exists, the program will place the recorded in LAFU status to initiate SMI premium billing, establish an HOC of “X” to indicate that HI is terminated because monthly benefits are terminated and generate a date of termination of HI (DOTH) equal to the date of suspension or termination (DOST). If current SMI entitlement does not exist, the HOC of “X” and DOTH equal to DOST will be established, but the LAF will remain in T3 status.

EXCEPTION:

If HI entitlement was originally based on the renal disease provisions (i.e., the HENC on the MBR is “K”), the system will change the LAF to U. However, as HI based on renal disease does not terminate when benefits terminate, the HOC of “X” and DOTH equal to DOST will not be established by the program. If it is later determined that HI entitlement under the renal disease provisions no longer exists (e.g., dialysis treatment ceases), a MADCAP conditional adjustment will be necessary to code the HOC/SOC of “S” and appropriate DOTH/DOTS.

All T3 actions processed through SALT will be alerted to the program service centers for additional action. The Form SSA-3926-C2 SALT output will contain two alert codes:

  1. code 432, manual letter necessary, and

  2. code 433, award determination necessary.

Instruct the typist to prepare a termination notice, Form SSA-L6901, rather than the usual SSA-L-597 letter. Taking into consideration the conditions involved in the case (i.e., whether SMI entitlement exists, if there is ongoing third party, if a verified BOAN has been established, etc.), instruct the typist to include the various paragraphs as shown in section C. below.

NOTE: The paragraphs indicated in C. below should be typed before any additional paragraphs; e.g., overpayment information.

If there is no evidence in the claims folder that an M or T claim was previously established, attach a Form SSA-567 to route the case to a Claims Authorizer for an award determination after the beneficiary notice has been released.

When current SMI entitlement exists, the LAP of U established on the terminated record may remain indefinitely. However, circumstances may dictate that additional activity will occur or that subsequent processing may be required. For example, if SMI becomes terminated for nonpayment of premiums, the system will change the LAF to X7.

There will also be instances when the terminated individual may have been previously entitled as a T or M on another SSN before becoming an auxiliary beneficiary. Or it is possible that a new award (usually a T or M) may be received simultaneously with the SALT termination output. In these cases, if SMI entitlement exists, it must be transferred immediately to the prior or new T or M claim (i.e., do not allow the terminated record to remain in LAF U status). Two separate manual actions through MADCAP are required:

  1. change the LAF U on the terminated record to X5 by summarizing a TOCA and RFCA of “X” and “5” respectively and entering the cross-reference number and BIC in RID 5, and

  2. reinstate or establish the prior or new claim through MADCAP. The two separate manual actions are required even when a new T or M claim is being processed at a later date.

To reinstate a prior T or M claim from X5 status, use the “Resum” facility with a zero rate. If a T claim is being reinstated, also enter the original DOEH and HOC of “E” in RID 6. Prepare an SSA-573 showing an SSA-31-C1 as the letter. For a T beneficiary, include the following paragraphs in the order shown; H09; if renal disease beneficiary include H22; H21; State buy-in or third party involved, H99; or if beneficiary will be billed, H60; and H23. For an M beneficiary include the following paragraphs in the order shown: H98; H21; if State buy-in or third party involved, H99; or if beneficiary will be billed, H60; MH07; and H23. All appropriate fill-ins must be given. Only the first paragraph of H21 will be used showing the current SMI premium rate and effective date. If the M or T has a foreign address include MH04 as the next to last paragraph.

Do not resume a prior M claim if current SMI entitlement does not exist on the terminated record. If a new M claim is received, it may be assumed that the individual wishes to be enrolled for SMI.

If a new T or M claim is being established, summarize a zero rate and full HI/SMI coding.

B. T8 Action Processed Through TATTER

The TATTER program processes T8 terminations for aged auxiliary beneficiaries whose monthly benefits terminate due to the cessation of the wage earner's disability in the same manner as the SALT program processes T3 terminations. As with SALT, the SSA-3926-2C TATTER output will also contain one of two legends:

  1. MANUAL LETTER NECESSARY, or

  2. AWARD DETERMINATION NECESSARY.

Follow the instructions in A. above regarding the beneficiary notification and subsequent handling.

C. T-3, T-8, and T-9 Actions Processed Through MADCAP

When terminating the benefits of an aged auxiliary who has health insurance entitlement, it must be determined what action will be taken to either maintain or terminate that entitlement. Unless the auxiliary has voluntarily withdrawn from Part B coverage (SOC-W) or has been terminated for nonpayment of premiums (SOC-T), the Part B coverage will continue after the date of termination to benefits. The benefit authorizer must determine on what claim number the Part B should continue. It must also be determined whether Part A coverage will continue or terminate. If there is no new or prior T claim, Part A coverage will terminate (unless there was dual-entitlement on another number). The Part A termination is recorded by entering a HOC of X. MADCAP will generate a DOTH equal to the DOST. If there is no known cross-reference number and BIC e.g., no new prior T or M claim, do not enter any number in the cross-reference fields in RID 5. As long as Part B coverage continues, and no cross-reference number and BIC is entered in the RID 5, MADCAP will place the auxiliary in LAF U so that Part B will continue. After the termination action is taken, route the case to a claims authorizer so that development for an uninsured claim can be taken. MADCAP will generate an 845 alert to emphasize the need for the claim development.

NOTE: If a B beneficiary is in a PIC O and is going to LAF-U, do not place the B in a PIC B. (Due to a systems limitation, it is necessary to leave the B in the PIC O.)

1. NEW OR PRIOR T OR M CLAIM

If a new or prior T or M claim is associated with the terminated record, take the following action:

  1. Cross-reference In RID 5 Is a T Claim Do not input a HOC of X. MADCAP will leave the LAF in terminated status (T-3, T-8, or T-9). On the T claim record Part A entitlement. Record Part B coverage as either ongoing or terminated depending on the current Part B status on the terminating record.

  2. Cross-reference In RID 5 Is A M Claim If part B coverage exists, input a HOC of X. MADCAP will generate a DOTH equal to DOST. The LAF will remain terminated. If Part B coverage does not exist, and no legitimate reinstatement is applicable (e.g., GEP election), do not code the M claim number in the cross-reference field in RID 5. This will allow the LAF to remain terminated. See C.5 below for processing the T or M claim.

2. GEP ELECTIONS INVOLVED

If an auxiliary has a current year GEP election when the termination is being processed and the HOC of X is being input, LAF U will be generated when the SPAC (e.g. $9.60) is already recorded on the MBR. If the SPAC has not been recorded on the MBR, MADCAP will allow the HOC of X, generate a DOTH equal to the DOST and leave the auxiliary in LAF-T status. Give the case to a claims authorizer for development on an uninsured award.

3. AWARD PLUS A TERMINATION

If an auxiliary is awarded monthly benefits and is also being terminated (LAF T-3, T-8 or T-9) in the same action, the HOC of X, if applicable, will be input on the award as the initial HOC. A DOTH will be generated equal to the DOST. The LAF will be U or T as applicable.

4. AUXILIARY HAS HI/SMI BASED ON THE RENAL PROVISIONS

If an auxiliary has HI/SMI based on the renal provisions, both Part A and Part B (if applicable) will remain open. The LAF will be U. A HOC of X will never be input for a renal HI/SMI beneficiary.

5. UNINSURED AWARDS PROCESSED THROUGH MADCAP

In cases where an uninsured award “T” or “M” BIC) can be processed, the majority are processed through the Award Processing Operations (APO). However, there are a small number of uninsured awards which must be prepared manually.

The Form SSA-2795-U2, in conjunction with the SSA-101-U3, will be used to award the “T” or “M” claimant. Full name and address (RID 2), account (RID 3), benefit (RID 4), and HI/SMI (RID 6) data will be introduced with the following summarization in RID 5: A PIC of “T” or “M”, a monthly rate of zero (0), the date of entitlement in the “From” column, and the “CON” entry in the “To” column. The debit coding will contain the number of summary lines, the appropriate COM and the cross-reference SSN and BIC of the auxiliary record. If the award is for a “T” BIC, code the RID 6 with a BIC, SOC, DES, and DEH. If the award is for an “M” with SMI and no HI, code RID 6 with a BIC, SOC, DES, and HOC of H. If premium-HI exists, code a HOC of Y and DEH. See A. above for beneficiary notification.

NOTE: The MADCAP Program will not require certain entries (e.g., PIAs, MBA's) when an uninsured award is processed.

The cross-reference account number (XAN) will be the number under which the beneficiary will continue to be enrolled or could be enrolled for HIB and/or SMIB. For the stop payment action, the XRAN of the continuing payment will be shown, while the continuing payment, if any, will reflect the XRAN pertaining to the prior entitlement. This data will be validated for its presence and consistency by the MADCAP Program. It will be furnished to the Health Insurance Utilization Master Tape to update their records in order to facilitate the accurate processing of Part A and B bills. See HI 00820.115C.1. to determine which BIC to use in the cross-reference BIC entry.

6. BENEFICIARY NOTIFICATION

The MADCAP program will automatically generate the beneficiary notice to the terminated individual.

The self-generated MADCAP notice will be based on incoming data and existing MBR data and will pertain only to the terminated record. If HI and/or SMI entitlement is being transferred to another record, an award notice for the other record will be produced.

In addition to the MADCAP benefit termination notice which contains the termination reason and effective date, paragraph H80 will always be generated. The generation of additional paragraphs by the program is dependent upon the variable factors inherent in the case. The paragraphs indicated below for various situations will be generated in the order shown and will be printed immediately after the opening paragraph of the MADCAP termination notice. They will be printed before any additional paragraphs generated by the program, such as over-payment information, and also before any additional paragraphs requested by the Benefit Authorizer.

a. Current SMI Entitlement Does Not Exist (SOC is Other Than “Y” or “G”)

  1. BOAN PRESENT

    If a verified BOAN is present on the MBR, i.e., the BOAN is preceded by a beneficiary reference code (BRC) of “V” in the “Beneficiary Reference Data” portion of the MBR, only paragraph H80 will be generated.

  2. BOAN NOT PRESENT

    If a verified BOAN is not present on the MBR, H80 will be followed by H97. (If SMI entitlement is being initially established or changed at the time the benefit termination action is being processed, see b. below.)

    If a closed period of HI is being established at the time of the termination action, paragraph H10 will precede H80. These will be followed by additional paragraphs pertinent to the case.

b. Current SMI Entitlement Does Exist (SOC is “Y” or “G”)

  1. CONTINUING THIRD PARTY COVERAGE PRESENT

    If there is continuing third party coverage on the MBR, paragraphs H80, H98, H23, and H99 will be generated followed by H97, if there is no verified BOAN on the MBR. (If continuing third party coverage is being established at the time of the benefit termination action, paragraphs H80, H98, H23, either H30, if a State buy-in is being processed, or H32, if a group payer is being processed, and H33 will be generated. Paragraph H97 will also be generated if there is no verified BOAN on the MBR.)

  2. CONTINUING THIRD PARTY COVERAGE NOT PRESENT

    If there is no continuing third party coverage, paragraphs H80, H98, H23 and H60 will be generated. If there is no verified BOAN on the MBR, H97 will also be generated.

  3. SMI ENTITLEMENT IS BEING INITIALLY ESTABLISHED

    If SMI entitlement is being initially established at the same time the benefits are being terminated, paragraphs H80, H12, H21, and either H60 (if there is no continuing third party) or H99 (if there is continuing third party) will be generated. If there is no verified BOAN on the MBR, paragraph H97 will also be generated.

  4. SMI ENTITLEMENT IS BEING CHANGED

    If the SMI date of entitlement is being changed during the termination action, paragraphs H80, H13, H21, either H60 or H99, and H97, if applicable will be generated.

D. Subsequent Activity

The MADCAP program will produce a code 845 alert which indicates that an award determination is necessary.

Upon completion of the MADCAP action, give the case to a Claims Authorizer to request the individual's earnings record and/or district office development and/or award processing.

When the termination action has placed the record in LAF U status and it is later determined that the HI and/or SMI entitlement must be transferred to another record, two separate manual actions through MADCAP are required:

  1. change the LAF U on the terminated record to X5 by summarizing a zero rate with a TOCA and RFCA of “X” and “5” respectively and coding the cross-reference number and BIC in RID 5, and

  2. reinstate the prior or establish the new claim through MADCAP.

To reinstate a prior T or M claim from X5 status, use the “Resum” facility with a zero rate. If a T claim is being reinstated, also enter the original DOEH and HOC of “E” in RID 6.


To Link to this section - Use this URL:
http://policy.ssa.gov/poms.nsf/lnx/0600820115
HI 00820.115 - Life Terminations for Aged Auxiliary Beneficiaries - 12/04/2012
Batch run: 12/04/2012
Rev:12/04/2012