Where an enrollee is receiving Social Security benefits or Railroad Retirement benefits,
the SMI premiums must be deducted from such benefits, except as indicated in HI 01001.020A. A beneficiary's premiums, which cannot be deducted in this manner because work or
some other event prevents payment of benefits, may be paid by direct remittance during
the year. If not so paid, they must be paid, or deducted from benefits, shortly after
the end of the year. (However, see HI 01001.105 when the enrollee is entitled to a special age 72 payment.) Most SMI enrollees are
in payment status and the premiums are deducted from their benefits. However, if an
enrollee's benefits are suspended, he/she will be billed quarterly. A disability beneficiary's
benefits may be suspended when:
An enrollee's disability-based benefit is suspended for a continuing disability investigation
(see also HI 00820.035);
An individual refuses vocational rehabilitation services; or
An individual has his/her disability insurance benefits reduced because of workers'
However, where benefit payments are withheld to recover an overpayment, premiums owed
for current or past months will be deducted before any (full or partial) adjustment
is made to recover the overpayment. Payment of the premium obligation is given priority
over recovery of the overpayment in order to prevent loss of SMI coverage during a
period in which the enrollee is receiving either no income, or only a portion of his/her
usual income from benefits or earnings.
If premiums owed cannot be deducted before SMI terminates, the program service center
should prepare a letter to notify the enrollee of the termination. The letter should
also advise the enrollee of the premium amount he/she must pay directly. This letter
should include a preaddressed remittance envelope. If premiums have been paid for
months beyond the last month of SMI coverage, the Direct Billing System will generate
a refund during the quarterly refund process.
RR SMI enrollees not entitled to monthly benefits are billed on a quarterly basis.
An individual entitled to monthly benefits, which are in suspense, is also billed