A tolerance does not apply when refunding excess premiums due a deceased beneficiary. Refund the excess premiums regardless of the amount.

Process the refund with or without a formal claim. Notice of a refund due the deceased beneficiary may be an inquiry by the survivor, a direct billing system (DBS) alert, Title II Redesign (T2R) A80022 alert or a formal claim.

When the Social Security Administration (SSA) records do not indicate that a third party payer or another individual paid the deceased beneficiary’s premiums, assume that the deceased beneficiary paid them. To process the refund, see HI 01001.325D of this section.

When SSA records indicate that another individual paid the deceased beneficiary’s premiums, assume that the other individual paid them. To pay the refund, follow instructions in GN 02330.065.

NOTE: If someone other than the beneficiary paid the premiums with own funds and that person is deceased, the legal representative of that person’s estate receives the refund. In the absence of a legal representative, a surviving relative of the beneficiary receives the refund following GN 01001.325D of this section.

There may be instances where an individual alleges that paying the premiums on behalf of the deceased beneficiary, but the SSA record does not show an authorized Medicare premium payer. In this circumstance, secure evidence of payment, and the nature of the remittance, to verify the allegation when the amount is $50.00 or more. Evidence of payment includes a cancelled check, bank statement, or other document that clearly indicates the individual party paid the excess premiums. If the amount is less than $50.00, secure a signed statement from the individual. To pay the refund, follow instructions in GN 02330.065.

Third party payers are typically organizations, municipalities, or other entities that pay premiums on behalf of a group of beneficiaries. These include:

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  a third party group payer as outlined in HI 01001.230;

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  a state that enrolled a beneficiary under a State Buy-in agreement, as outlined in HI 00815.000; or

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  the Office of Personnel Management (OPM).

Determine the recipient of the refund based on whether the excess Medicare premiums are for months of coverage the beneficiary paid or the third party paid. CMS handles refunds to third party payers.

In cases where there is an A80022 alert and SSA records indicate payment by the deceased beneficiary and a third party payer for the same months, pay the excess Medicare premiums to the deceased beneficiary, or the individual who paid premiums of behalf of the beneficiary. This is because the third party payer can retroactively pay the Medicare premiums for the months of coverage that the deceased beneficiary already paid.

EXAMPLE: premium refund resulting from retroactive payment of premiums by a third party payer: Mr. Dance paid Medicare premiums for the months of coverage from October 2013 through May 2014. Mr. Dance passes away on May 10, 2014. In August 2014, the state of residence determines that Mr. Dance was eligible for State Buy-in effective January 2014. The State paid the Medicare premiums for the months of coverage from January 2014 through May 2014, resulting in duplicate payments for these months. The state was the proper payer for the Medicare premiums, and the prior payments made by Mr. Dance for January through May 2014 are the excess premiums. An A80022 alert generates to refund the excess Medicare premiums Mr. Dance paid.

When a beneficiary not covered under a State buy-in agreement has entitlement to both a Social Security benefit and a Railroad Retirement annuity or pension, the beneficiary pays SMI premiums to the RRB. The RRB handles refunds to these deceased beneficiaries.