TN 53 (02-23)

HI 01001.225 When Premium Notices May Be Sent to an Individual Other Than An Enrollee

In certain circumstances, an enrollee must pay premiums by direct remittance may wish to have the premium notices sent to a another person to assure continuance of the enrollee's Supplementary Medical Insurance (SMI). A third party billing to such a person (e.g., relative, friend, organization, or agency) may be arranged. This is in contrast to a group billing arrangement (see HI 01001.235) in which an organization is billed and pays premiums for a substantial group of enrollees.

Someone other than the enrollee may pay an enrollee's premiums. This option does not need the Social Security Administration's approval. However, a bill may be sent to another person on behalf of an enrollee only when the following criteria are met:

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  the enrollee, if able to transact business, gives written consent;

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  the potential payer demonstrates an interest in the personal welfare of the enrollee; and

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  the requested billing is necessary or advisable to assure continuance of the enrollee's SMI (e.g., an enrollee is not mentally or physically able to manage their own financial affairs or does not have the means to pay their premiums).

The enrollee or a prospective payer need not initiate a request for third party billing. The field office (FO) should be alerted to situations (including the initial interview) in which it is clear that an enrollee cannot pay their premiums and will need assistance. The FO will try to locate a person who will pay premiums to assure that the enrollee gets full benefit of their SMI coverage. (See HI 00825.000 for FO assistance pending the selection of someone to assist the enrollee.)

The enrollee and the prospective payer must complete a CMS-2384, Third Party Premium Billing Request. Parts I and II of the CMS-2384, to be completed by the enrollee and the premium payer respectively, are self-explanatory and provide spaces for their signatures and a brief explanation of the reasons for the request. If the enrollee is unable to give their written consent, the person making the request completes both parts. Part I shows why the request is being made and explains why the enrollee cannot sign. FO personnel should review the request for completeness and accuracy, applying the criteria in the second paragraph above, and, if these criteria are met, sign the request in Part III of the CMS-2384. The FO gives one copy to the payer for the payer's records and forwards the request for the program service center for appropriate action.

When the CMS-2384 has been processed, the Master Beneficiary Record address field will be changed to show the payer as a “Premium Payer for” address and that all automated Centers for Medicare & Medicaid Services (formerly Health Care Financing Administration) and SSA correspondence will then be directed to the payer.

Though the payer will receive premium billings and pay premiums on behalf of the enrollee, the payer will not receive SMI benefit payments. It is important that the payer (and, to the extent possible, the enrollee) understands that although the enrollee needs assistance in paying their premiums, this does not relieve them of their responsibility for paying premiums promptly. FO personnel should emphasize to the payer the importance of paying premiums timely to assure continuance of the enrollee's SMI coverage, the necessity for giving prompt notice of any change in the payer's address, and advance notice (preferably 3 months) if a change in payer becomes necessary. If an officer of an institution is being established as premium payer for an institutionalized enrollee, that officer should be advised to notify the FO promptly if the enrollee returns home or is transferred to another institution.

In the event a change in payer becomes necessary, develop a new payer in accordance with the guides outlined in this section.