TN 49 (11-22)

HI 01001.040 Beneficiaries in Benefit Payment Status


The Social Security Act requires that premiums be deducted from monthly benefits. The beneficiary does not have the choice of paying their premiums by check or money order to avoid the deduction. When the enrollee is receiving monthly benefits, ordinarily one month's premium will be deducted from each month's benefit unless the enrollee owes more than one month's premium. In that case, the current month's premiums will be deducted along with the premium for the previous months. The initial premium deduction is made from the monthly benefit for the month preceding the first month of coverage. The premium for the month of death (for which no monthly benefit is payable) is thus deducted from the enrollee's benefit for the preceding month. The purpose of collection by deduction from benefits is to keep premium collection costs at a minimum.


When a SMI enrollee is in current payment status, upon being awarded monthly benefits, the enrollee's first benefit check will be reduced, if necessary, to take into account any unpaid accrued SMI premiums. (Any excess prepaid premiums will be refunded as soon as possible.) Thereafter, a single month's premium deduction will ordinarily be made from the benefit for each subsequent month. For example, an enrollee already entitled to monthly benefits is awarded SMI coverage beginning 3/00, and receives their first check at the beginning of 5/00, premiums of $45.50 for the months 3/00 - 5/00 are deducted from the first check. The check received in 5/00 is the benefit check for April, but because premiums due for a month are deducted at the beginning of that month, the premium for May is withheld. If the enrollee has already paid premiums through June, the excess amount paid will be refunded. Subsequent checks are reduced by the amount of the premiums for the months in which the checks are received. Applicants should be advised of this policy at the time they file their claim for monthly benefits or when enrolling for SMI whichever is later. (If a beneficiary is in suspense status immediately following an initial award of monthly benefits or of SMI, see HI 01001.045A. If the beneficiary is in deferred status following the initial award, see HI 01001.045C.)


To collect premiums inexpensively and expeditiously, all SMI premiums an individual owes will be deducted from the first Title II (Social Security) monthly benefit check payable to the individual from which it is feasible to do so. Thus, when benefit payments are resumed after a period of suspension, all premiums will ordinarily be deducted from the first benefit check. Similarly, any premiums an individual owes will be deducted from a "one-check-only" payment made while the individual is in suspense or from a Title II payment made to the individual's estate after their death.

No special effort will be made to credit a possible premium remittance, which may be in process upon resumption of benefit payments after a period of suspension. Any resulting premium overpayment will be refunded no later than the end of the quarter after the quarter in which monthly payments are resumed if the enrollee is in current pay status when a refund is being considered (see example, HI 01001.045C.).

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HI 01001.040 - Beneficiaries in Benefit Payment Status - 11/23/2022
Batch run: 11/23/2022