TN 22 (11-01)

HI 01001.065 Premium Payment Information Furnished Enrollee at the Time of Enrollment



Enrollees are not asked to pay premiums at the time of enrollment. Instead he/she will be informed, in accordance with the rules in HI 01001.025, that his/her initial premium payment should be made upon receipt of a bill from Centers for Medicare & Medicaid Services (CMS). It should be pointed out that his/her award notice is not a bill. The enrollee should receive the first bill within 30 days after receipt of the award notice. However, if a payment is offered at the time of enrollment, the payment may be accepted. The enrollee need not pay the premiums. If he/she is unable to pay for some reason, a friend or relative may make the premium payment on his/her behalf (see HI 00805.105 and HI 01001.225). In other cases, the premiums may be paid on a group basis by a lodge, union, employer, or other organization (see HI 01001.230 - HI 01001.270). Refer to HI 00815.088 for payment of premiums by the State under a buy-in arrangement.


When the enrollee insists on making a premium payment at the time of enrollment, he/she will be permitted to pay up to a year in advance.

Enrollees receiving a quarterly bill who wish to pay less frequently than each quarter may pay premiums for two, three, or four quarters at a time. (NOTE: When an enrollee pays in advance, a billing notice will not be sent until his/her premium liability is $10.00 or more.) When an enrollee wishes to pay for two to four quarters at a time, he/she should make sure the remittance is in the correct amount and return the bottom of the billing notice (CMS-500) with the payment. All payments should be forwarded to the Medicare Premium Collection Center (see address in HI 01001.030).


Billing notices are prepared according to premium information carried in the direct billing system (DBS). Premium payments are due by the 25th of the month the bill is mailed.

If an enrollee has made an advance premium payment for a quarter, a subsequent billing notice for future billing will not occur until his/her premium liability is $10.00 or more. However, if the enrollee submits a payment shortly before the billing selection date, it is likely he/she will receive a billing notice, as the payment is still in the processing stages.

Example: Mrs. Martin, an "M" beneficiary, is on a quarterly "A" billing cycle. She is billed in January. She paid her premiums in February for 8 months (February through September). She will not receive a bill in April. However, her next bill will be sent in July for premiums due for 1 month, October. The due date of all billing notices is the 25th of the month in which it is received.

Explain to the enrollee the importance of prompt payment of Supplementary Medical Insurance (SMI) premiums; i.e., payment should be made upon receipt of the bill; and failure to pay premiums timely may result in termination of SMI coverage. Tell the enrollee when coverage is expected to start and that they may receive the billing notice within 30 days after receipt of the SMI award notification. If the notice or other advice is not received within 60 days after the beginning of SMI coverage, the enrollee should contact the field office regarding his/her SMI premium billing. Inform the enrollee about the rules in HI 01001.025 concerning payment by remittance since those rules apply regardless of whether the premium is being paid by the enrollee or by someone on his/her behalf.

Information regarding the grace period should not be provided to the enrollee unless specifically requested. Otherwise, the enrollee may be inclined to put off making the payment until later or may even forget making the payment, causing termination of his/her coverage and loss to the trust fund. In this event, the enrollee loses the real advantage of the long grace period. For example, if an emergency arises which prevents him/her from making payments when due, the enrollee has an extra 2 months, if necessary, in which to catch up.


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HI 01001.065 - Premium Payment Information Furnished Enrollee at the Time of Enrollment - 11/13/2001
Batch run: 03/02/2004