TN 17 (10-00)

HI 01005.015 Collection of Health Insurance (Part A) Premiums

A. POLICY-Billing Information

Most premium HI enrollees are uninsured beneficiaries. A small percentage are insured; e.g., Disabled Working Individuals (DWI) or totalized. DWIs must have premium HI to be eligible for SMI ( See HI 00801.170). All premiums must be paid by direct remittance, either by the enrollee, by a State under a State Buy-in agreement, or group payer on his behalf. The rules applicable to the collection of SMI premiums from uninsured beneficiaries apply to the collection of HI premiums, except as otherwise provided in the HI premium collection instructions. (An enrollee must have SMI (Part B) to be entitled to premium HI.) (See HI 00801.126)

1. Billing Premium--HI Enrollees

Premium HI enrollees must pay premiums by direct remittance. Premium HI entitlement can occur for beneficiaries if they are entitled to SSA benefits under the totalization provisions but are not insured for Medicare coverage. (See GN 01703.500.) This will not apply to disabled beneficiaries receiving totalization benefits who are not insured for Medicare coverage.

A group payer may also make payments for the enrollee. An enrollee may, if he/she desires, pay up to 12 months in advance. When this occurs, billing will be suspended until the premium liability reaches $10.00.

2. Monthly Billing Cycle

Premium HI bills are sent to HI enrollees monthly due to the large Part A premium amount. If a group is paying for one type of coverage, the bill will only reflect the type of coverage the enrollee is being billed for.

3. Monthly Billing and Grace Period

For Premium-HI, the grace period for paying premiums extends to the end of the third month in which premiums have not been paid.

When an enrollee is billed monthly, the premium should be paid by the due date shown on the initial billing notice (the 25th of the month). If the payment is not received by that date, a second notice will be sent to the enrollee. This notice will include two months of premiums, (the current premium liability and the liability from last month"s billing notice). If 60 days has elapsed and a payment has not been received, a delinquent notice will be sent. This notice will include three months" premiums, the premium liability for the current month"s billing notice and the amount due from the last billing notice. This notice will not include a termination date at this time. If after 90 days, the initial premium liability has not been paid, the enrollee will receive a second delinquent notice. This notice will now include the premium liability for the current month, the amount due from the last billing notice, and a termination date.

It is important to note that when a billing notice is sent to an enrollee, a receivable balance is established by the direct billing system. When the receivable balance is 90 days old, the direct billing system triggers a termination. The aging of the receivable balance is the key factor to the termination of the grace period. To avoid termination, at least one month"s liability or that portion of the premium liability that is 90 days old must be paid.


Mr. Jones was sent a delinquent notice early in 12/98 for $1418.00. The termination date field indicated that the hospital and medical insurance would end on 12/31/98. To protect his Part A and B coverage for one month, Mr. Jones would have to pay at least $354.50. This would reduce the Part A to 927.00 and the Part B to 136.50. Another delinquent notice would be sent to him in January, 1999 reflecting a termination date of 01/31/99.

B. POLICY-- Crediting Payments

If a payment is received for less than the total premium amount due, the payment is applied first to the premium liability that is in danger of termination or the oldest receivable balance. If neither type of coverage is close to being terminated for nonpayment, the payment is applied first to the coverage (HI or SMI) most in arrears, timewise. If the ages of the receivable balances are equal, the payment will be applied to Part B first then to Part A unless the enrollee is a DWI. For a DWI enrollee, if the receivable balances are equal, the payment will be applied to Part A first then to Part B. (Note: In the case of the DWI enrollee, payments are applied first to Part A since Part A coverage is required in order to retain the Part B.)

C. POLICY-- OPM Annuitant

A premium HI enrollee who is receiving a civil service annuity will be billed for Part A since the law does not allow deduction from the annuity.

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HI 01005.015 - Collection of Health Insurance (Part A) Premiums - 10/31/2000
Batch run: 10/31/2000