TN 1 (08-08)

HI 00830.045 Delayed Deletions from State Buy-In

A. Process – State buy-in coverage and equitable relief

Whenever processing a deletion of State buy-in coverage, equitable relief will be automatically applied to the extent that the beneficiary will never be required to pay more than 3 months SMI premium arrearage. Cases requiring relief are processed by entering a SMI 3PTY STOP that is not less than COM-3, regardless of the actual deletion reported by the State. For example, the State reported a deletion date of 6/2007 and the manual processing COM is 12/2007. The SMI 3PTY STOP entered when the case is processed must be 9/2007, leaving the enrollee liable for 10/2007 through 12/2007 (retroactive period) plus the current and future months. The claimant will not have the arrearage immediately deducted from his/her benefit check.

B. Notice explaining State deletion to claimant being billed

A claimant in current pay will have only one-months premium deducted from his/her first benefit payment. In the case of a claimant who is being billed, he/she will receive a bill for the current quarterly billing period (3-month premium). When a letter is sent explaining the State deletion, it will also explain that the possibility of relief from paying the 3 months' arrearage exists. Use a paragraph similar to the following with all other necessary paragraphs.

  • “The State has stopped paying your Supplementary Medical Insurance premiums beginning ________. You now owe __________ months' premiums. Your benefits will be reduced to collect (you will soon be billed for) unpaid past due premiums of $ ___________ within 30 days. If having your benefits reduced by this amount (paying this amount) would create a severe hardship for you, you may in some cases, be relieved of the responsibility of paying the amount due. For more information and assistance, please contact your local social security office. When you visit or telephone that office, please have this notice with you.”

C. Notice explaining State deletion to claimant paying premiums by direct remittance

If the claimant pays his premiums by direct remittance, add the following to the above paragraph. “Relief from paying the arrearage will be approved only if premiums for current months of coverage are paid when due.”

D. MACADE action

Do not deduct or bill for the arrearage. Use a “PD” with a zero monthly rate entry via MACADE to insure that only the current monthly premium is deducted. Diary the case for 60 days. If after 60 days no response has been received from the claimant, deduct the arrearage from his benefits or send a bill for the arrearage. A MACADE action will be necessary to utilize the special entry of “UD” and a monthly rate equal to the premium arrearage resulting from the third party buy out. Send a letter explaining the deduction or premium bill. Prepare a SSA-666 (Adjustment in Trust Fund Account) for trust funding purposes and a SSA-1257 (PHUS Data Exchange) to record event 020.

  • Example

    For example, a third party deletion exception occurs in 7/2007. The buy-out date is 6/2007 and the COM, when the exception is being processed is 9/2007. The individual owes premiums from 7/2007 through 10/2007. The arrearage is for 3 months' premiums from 7/2007 through 9/2007. Record the SMI 3PTY STOP of 6/2007 through MACADE. Since the arrearage cannot be immediately withheld from the benefits, via MACADE enter a HST screen with a special entry of “PD” and a monthly rate of zero. The special entry of “PD” will result in the current month premium only being deducted and ignore any SMI premium arrearage. Diary the case for 60 days and prepare a notice. If no response is received from the claimant concerning waiver, via MACADE enter HST screen, with a special entry of “UD” and a monthly rate equal to the 3 months' premium arrearage. Enter SSA-666 trust funding form equal to the premium arrearage and SSA-1257 PHUS to record event 020. Also, prepare a notice explaining the deduction.

    If the district office approves waiver, no further action is necessary except to cancel the diary if needed. See HI 01015.040 for trust fund instructions.

E. SMI coverage for beneficiaries pay through direct remittance

For the uninsured or directly billed beneficiary paying premiums through direct remittance, SMI coverage will be terminated if no relief is given or special payments are not made to resolve the accrued arrearage.

F. Reference

HI 01015.040, Preparation of the form SSA-666<