HI 01001.360 “Good Cause” Defined
“Good cause” will be found when the enrollee establishes by a credible statement, not contradicted by any evidence available to the adjudicating office, that failure to pay premiums within the normal period resulted from conditions over which he had no control, or which he could not reasonably be expected to guard against, considering his education, competence, health, and any other pertinent circumstances. For example, good cause would be found if payment was late because the enrollee was mentally or physically unable to make the payment on time and no one was acting on his behalf to protect his interests; or because he had some reasonable basis for his belief that the payment had been made when actually, it had not; or because of some administrative fault or error, e.g., billing notices were misaddressed and thus, not received.
Straitened circumstances or poverty do not constitute good cause per se; a person enrolling is expected to take into account his ability to pay premiums. On the other hand, a financial emergency arising because of unavoidable and unexpected circumstances might constitute good cause. A reasonable doubt should be resolved in favor of a good cause finding, especially if the enrollee has not previously been late in making payment. However, each good cause determination is based on the pertinent facts in the particular case, including previous extensions granted.
B. Examples of Good Cause Situations
Because of his senility, an enrollee's secretary looked after his affairs, including the payment of SMI premiums. When the secretary left to take another position, several months elapsed before another secretary took her place. In the interim, the enrollee's initial grace period for payment of premiums elapsed and his SMI coverage was terminated. Shortly after starting work and prior to the expiration of the extended grace period, the new secretary discovered the premium notices and the notice of termination and immediately sent to the PSC a check for all premiums due together with a full explanation. Good cause will be found.
An enrollee went on vacation for several months immediately after he enrolled. Since he lived alone, he made arrangements with his landlady to pay his bills, and left the necessary funds with her. However, she failed to pay his premiums, and by the time the enrollee returned home, his SMI coverage had been terminated. He contacted the DO, explained his situation, and requested an extension until the end of the following month—the last day of the extended period. Upon payment of his premiums at (or before) that time, good cause would be found and his SMI coverage would be reinstated. If, however, he failed to tender payment (or be entitled to benefits from which the premium could be deducted) before the end of the extended period, good cause would not be found and the termination would stand.
C. Relief Required Because of Administrative Fault
These instructions apply in all good cause cases, including cases in which delay in payment was caused by administrative error. The procedures in HI 01001.295 and 01001.305 remain applicable only in those situations when administrative fault or error prevented the enrollee from paying his premiums within the extended grace period; e.g., the enrollee did not receive timely billings or the notice of termination and the error is not discovered until shortly before the end of the extended period or the extended period has expired.