TN 59 (06-24)

HI 01001.011 Examples of Premium Increases for Late Enrollment

A. Example - Claimant has no excludable months

NOTE: The example provides historical information on late enrollments prior to the changes beginning January 1, 2023.

John Brown, turned age 65 and first became eligible for Part B in 1/2017. John did not enroll in Part B during John's IEP. John subsequently decided John needed Part B and enrolled on 2/15/2019 (in the GEP beginning 1/1/2019). The months considered in determining John Brown's premium increase begin with 5/2017 (the first month after the close of John's IEP) and extend through 3/2019,(through the end of the enrollment period in which John enrolled) (see HI 01001.010 B.1.) for a total of 23 months.

Since there is only one full 12-month period in 23 months, John Brown's premium (beginning 7/2019, the first month of SMI coverage) was 10 percent greater than if John had enrolled in John's IEP.

How we determined the penalty:

The following months are counted against John for purposes of the premium increase:

5/2017- 12/2017 inclusive = 8 months

1/2018 - 12/2018 inclusive = 12 months

1/2019 - 3/2019 inclusive = 3 months

The total number of countable months is 23.

 

B. Example - How a penalty of 160 percent would occur

NOTE: The example provides historical information on late enrollments prior to the changes beginning January 1, 2023.

Hetty Blue was born in 2/1940 and was therefore eligible to enroll in SMI during the Initial Enrollment Period (IEP) ending 5/31/2005. Hetty first enrolled during the 2008 GEP, with coverage effective 7/2008; Hetty's SMI was subsequently terminated effective 1/31/2009 for nonpayment of premiums. Hetty Blue next enrolled during the 2022 GEP with coverage effective 7/2022. Hetty Blue must therefore pay a 160 percent increase in their premiums.

How we determined the penalty:

The following months are counted against Hetty for purposes of the premium increase:

06/2005 - 12/2005 inclusive = 7 months

1/2006 - 12/2007 inclusive = 24 months

01/2008 - 03/2008 inclusive = 3 months

02/2009 - 12/2009 inclusive = 11 months

01/2010 - 12/2021 inclusive = 144 months

01/2022 - 03/2022 inclusive = 3 months

The total number of countable months is 192.

C. Example - Late enrollment plus reenrollment

NOTE: The example provides historical information on late enrollments prior to the changes beginning January 1, 2023.

Irving Howard, who was born on 1950, and was eligible to enroll during the IEP ending 5/31/2015, first enrolled in 3/2017 during the extended GEP. SSA terminated Irving's coverage for nonpayment of premiums effective 9/30/2017, and Irving reenrolled in 2/2020. Under HI 01001.010B.1. and HI 01001.010B.2.b., and had to pay a 40 percent increase in Irving's premiums.

How we determined the penalty:

The following months are counted against Irving for purposes of the premium increase:

06/2015 - 12/2015 inclusive = 7 months

1/2016 - 12/2016 inclusive = 12 months

01/2017 - 3/2017 inclusive = 3 months

10/2017 - 12/2017 inclusive = 3 months

01/2018 - 12/2019 inclusive = 24 months

01/2020 - 03/2020 inclusive = 3 months

The total number of countable months is 52, so a 40% increase would be chargeable against Irvin Howard.

D. Example - Employer Group Health Plan (EGHP) Coverage and Special Enrollment Period (SEP)

Kirk Ford was born 11/11/1945 . Kirk worked and was covered under an EGHP each month beginning prior to attainment of age 65 and continuing until Kirk's retirement in 8/2021. In 8/2021, Kirk filed for HI, monthly benefits, and for SMI under SEP rules, submitting evidence that Kirk was covered under an EGHP from age 65 onward. The months during which Kirk was covered under an EGHP based on current employment were excludable for surcharge purposes. Therefore, since all months beginning with age 65 were months of coverage under an EGHP, Kirk had no months chargeable against Kirk for premium surcharge purposes.

E. Example - EGHP Coverage, No SEP Possible

Jerry Pendleton enrolled for HI in 9/2018, the month Jerry attained age 65. Jerry did not enroll in SMI. During the 2022 GEP, Jerry requested SMI enrollment. Jerry had been covered under an EGHP from age 65 through 4/2021, when Jerry retired. Although Jerry did not meet the requirements for a special enrollment period because more than 8 months had elapsed since Jerry's last coverage under an EGHP, the period from 1/2019 through 4/2021 is not counted because of EGHP coverage. The period from 5/2021 through 3/2022 is counted but no surcharge is assessed because that period is less than 12 consecutive months.

F. Example - After 1/1/2023, No Option for Exceptional Condition SEP

Mark Evans enrolled for HI in 4/2023, the month Mark attained age 65. Mark worked and was covered under an EGHP until Mark's retired in 4/2024. Mark Evans failed to enroll in SMI during Mark's 8-month EGHP SEP window and was not eligible for any exceptional conditions SEPs. Mark therefore enrolled in the GEP in 1/2026, with SMI being effective 2/2026. Mark's premium was increased 10% because 21 months had passed from 5/2024 through 1/2026.

G. Example - After 1/1/2023, Formerly Incarcerated Individual SEP

Maria Daniels was incarcerated in 12/2020. In 2/2023, Maria turned 65. Maria was released from incarceration in 6/2023 and enrolled in HI and SMI in 6/2023 using the formerly incarcerated individual SEP for incarcerated individuals. No late enrollment penalty is assessed because Maria Daniels enrolled prior to 06/30/2024 under this SEP.


To Link to this section - Use this URL:
http://policy.ssa.gov/poms.nsf/lnx/0601001011
HI 01001.011 - Examples of Premium Increases for Late Enrollment - 06/13/2024
Batch run: 06/13/2024
Rev:06/13/2024