Robert Brown, a disabled adult child, was covered under working parent's LGHP when
became entitled to HI (and refused SMI) effective 1/86.
In 1998, the workforce dropped to less than 100 employees throughout most of the year.
Therefore, the plan is no longer considered an LGHP effective 1/1/99. Since the plan
is no longer an LGHP, Robert's last opportunity to enroll under the SEP provisions
began 1/99 (the month following the last month the plan was considered an LGHP) and
ended 7 months later. Robert filed for SMI in May and coverage was effective 6/99.
The premium surcharge calculation excludes the months of 1/87 through 12/98. The months
5/86 through 12/86 (8 months) are included in calculating the surcharge because they
occurred after the end of Robert's IEP and prior to 1/87, the effective month of the
SEP provision for the disabled. In addition, the months of 1/99 through 5/99 are included
in the calculation of the surcharge because months during the SEP when Robert was
not covered under a LGHP. This is a total of 13 months and results in a 10 percent
surcharge.