42 C.F.R. §§ 408.40–408.92

§408.40. Deduction from monthly benefits: Basic rules.

42 C.F.R. § 408.40

(a)

Deduction from monthly benefits.

(1)

Enrollees who are receiving monthly benefits do not have the option of paying by direct remittance to avoid deduction.

(2)

If the enrollee is entitled to more than one type of monthly benefit, the order of priority for deduction is as follows:

(i)

Railroad retirement benefits.

(ii)

Social security benefits.

(iii)

Civil service annuities.

(b)

Deduction from initial or reinstated benefits. When an enrollee receives a monthly benefit check after an initial award or after a period of suspension, that check is, if administratively feasible, reduced or increased to deduct unpaid premiums or refund premiums paid in advance by direct remittance.

(c)

Ongoing deductions. The premium for each month is deducted from the cash benefit for the preceding month, e.g., the premium for March is deducted from the benefit for February, which is paid at the beginning of March.

Notes, amendments, and revision history

Authority

Authority: 42 U.S.C. 1302 and 1395hh.

Source

Source: 52 FR 48115, Dec. 18, 1987, unless otherwise noted.

§408.42. Deduction from railroad retirement benefits.

42 C.F.R. § 408.42

(a)

Responsibility for deductions. If an enrollee is entitled to railroad retirement benefits, his or her SMI premiums are deducted from those benefits by the Railroad Retirement Board (RRB) even though he or she is also entitled to social security benefits or a civil service annuity, or both.

(b)

Action when benefits are suspended. If the railroad retirement benefits are suspended, the RRB sends premium notices requesting direct remittance, to be made in accordance with the rules set forth in Subpart D of this part.

Notes, amendments, and revision history

Authority

Authority: 42 U.S.C. 1302 and 1395hh.

Source

Source: 52 FR 48115, Dec. 18, 1987, unless otherwise noted.

§408.43. Deduction from social security benefits.

42 C.F.R. § 408.43

SSA, acting as CMS's agent, deducts the premiums from the monthly social security benefits if the enrollee is not entitled to railroad retirement benefits. (If the benefit is less than the monthly premium, the benefit is withheld and the enrollee is required to pay the balance through direct remittance.)

Notes, amendments, and revision history

Authority

Authority: 42 U.S.C. 1302 and 1395hh.

Source

Source: 52 FR 48115, Dec. 18, 1987, unless otherwise noted.

§408.44. Deduction from civil service annuities.

42 C.F.R. § 408.44

(a)

Responsibility for deductions. If an enrollee is not entitled to railroad retirement benefits or social security benefits, and is receiving a civil service annuity, the premiums are deducted from that annuity by the Office of Personnel Management (OPM) on the basis of a notice from SSA indicating that the annuitant is entitled to SMI.

(b)

Deduction of spouse's premiums. If the annuitant's spouse is also enrolled for SMI and is not entitled to a civil service annuity or to social security or railroad retirement benefits, and the annuitant gives written consent, OPM also deducts the spouse's premium from the annuitant's monthly check.

(c)

Withdrawal of annuitant's consent.

(1)

If an annuitant wishes to withdraw consent for deduction of the spouse's premium, he or she must send written notice of withdrawal to OPM.

(2)

The withdrawal notice is effective with the third month after the month in which it is received, or with the month specified in the notice, whichever is later.

Notes, amendments, and revision history

Authority

Authority: 42 U.S.C. 1302 and 1395hh.

Source

Source: 52 FR 48115, Dec. 18, 1987, unless otherwise noted.

§408.45. Deduction from age 72 special payments.

42 C.F.R. § 408.45

(a)

Deduction of premiums. SMI premiums are deducted from age 72 special payments made under section 228 of the Act or the payments are withheld under procedures that correspond to the rules set forth in §§ 408.40 and 408.43.

(b)

Collection of premiums while age 72 special payments are suspended. If the age 72 special payments are suspended, CMS or its agent notifies the enrollee to pay premiums by direct remittance, in accordance with the rules set forth in § 408.60.

(c)

Grace period. The grace period ends with the last day of the third month after the billing month.

(d)

Resumption of age 72 special payments.

(1)

If age 72 special payments are resumed before the end of the grace period and all premium arrears can be deducted from those special payments, SMI coverage continues and the enrollee need not pay by direct remittance.

(2)

Subsequent special payments are reduced by the amount of the premium for as long as the enrollee receives special payments.

Notes, amendments, and revision history

Authority

Authority: 42 U.S.C. 1302 and 1395hh.

Source

Source: 52 FR 48115, Dec. 18, 1987, unless otherwise noted.

§408.46. Effect of suspension of social security benefits.

42 C.F.R. § 408.46

(a)

Benefit payments to be resumed during the taxable year.

(1)

If social security benefit payments are scheduled to be resumed during the enrollee's current taxable year, the enrollee is not billed.

(2)

The enrollee may, if he or she wishes, pay the premiums during suspension of benefits.

(b)

Benefit payments not to be resumed during the enrollee's current taxable year.

(1)

If social security benefits are suspended for a period that will not permit collection of all premiums due from monthly benefits payable in the enrollee's current taxable year, CMS or its agents bill the enrollee and require direct remittance in accordance with subpart D of this part.

(2)

The first billing is for whatever premiums are necessary to place the enrollee in a quarterly cycle.

(3)

Thereafter, the billing is on a quarterly basis. (Quarters for different enrollees are staggered throughout the year.)

(4)

The enrollee has the option of paying premiums for more than one quarter at the same time.

Notes, amendments, and revision history

Authority

Authority: 42 U.S.C. 1302 and 1395hh.

Source

Source: 52 FR 48115, Dec. 18, 1987, unless otherwise noted.

§408.47. Reserved

42 C.F.R. § 408.47

Notes, amendments, and revision history

Authority

Authority: 42 U.S.C. 1302 and 1395hh.

Source

Source: 52 FR 48115, Dec. 18, 1987, unless otherwise noted.

§408.50. When premiums are considered paid.

42 C.F.R. § 408.50

(a)

Actual deduction. A premium is considered paid if it is actually deducted from a monthly benefit check. Therefore—

(1)

The premium is “paid” even if SSA later finds that the benefit was paid in error; but

(2)

A finding that a monthly benefit was erroneously withheld does not constitute payment of the premium for that month. Since there was no payment, there was no deduction. The enrollee is billed and continuance of coverage depends on payment of premiums before the end of the grace period or extended grace period.

(b)

Payment within the grace period. Overdue premiums are considered paid within the grace period in the following situations:

(1)

Benefits are resumed during the grace period.

(i)

Monthly cash benefit payments are payable for the last month of the initial grace period or for earlier months on the basis of a notice filed by the enrollee before the initial grace period ends; and

(ii)

Those payments are sufficient to permit deduction of all overdue premiums.

(2)

Annual earnings report or other report submitted during the grace period shows a benefit is due.

(i)

Before the end of the grace period, the enrollee submits a report clearly showing that monthly cash benefits, previously withheld, are payable; and

(ii)

Those benefits are sufficient to permit deduction of the full amount of the overdue premiums.

(3)

Premium arrears are paid by direct remittance. The enrollee makes a direct remittance payment of all overdue premiums before the end of the grace period.

Notes, amendments, and revision history

Amendments

[52 FR 48115, Dec. 18, 1987; 53 FR 4159, Feb. 12, 1988; 56 FR 48112, Sept. 24, 1991]

Authority

Authority: 42 U.S.C. 1302 and 1395hh.

Source

Source: 52 FR 48115, Dec. 18, 1987, unless otherwise noted.

Amendments

[52 FR 48115, Dec. 18, 1987; 53 FR 4159, Feb. 12, 1988; 56 FR 48112, Sept. 24, 1991]

§408.52. Change from direct remittance to deduction.

42 C.F.R. § 408.52

If a direct remittance enrollee becomes entitled to monthly benefits—

(a)

The SMI premiums are deducted from those benefits; and

(b)

The enrollee is notified of the deduction and of any adjustment of the initial benefit check that is required to collect overdue premiums or refund premiums paid in advance.

Notes, amendments, and revision history

Authority

Authority: 42 U.S.C. 1302 and 1395hh.

Source

Source: 52 FR 48115, Dec. 18, 1987, unless otherwise noted.

§408.53. Change from partial direct remittance to full deduction.

42 C.F.R. § 408.53

If a benefit that was less than the premium (and therefore required direct remittance of the difference) is increased to an amount equal to, or greater than, the premium—

(a)

The full premium is paid from the benefit; and

(b)

Any amounts the enrollee had paid toward premiums not yet due are refunded.

Notes, amendments, and revision history

Authority

Authority: 42 U.S.C. 1302 and 1395hh.

Source

Source: 52 FR 48115, Dec. 18, 1987, unless otherwise noted.

§408.60. Direct remittance: Basic rules.

42 C.F.R. § 408.60

(a)

Premiums not deducted from monthly benefits under Subpart C of this part or paid by a State buy-in agreement must be paid by direct remittance to CMS or its agents, by or on behalf of the enrollee.

(b)

Quarterly payment is preferred as more cost-effective, but monthly payment is accepted if the enrollee is unwilling or unable to make quarterly payments or is also paying hospital insurance premiums, which must be paid every month.

(c)

CMS, directly or through its agents, sends quarterly or monthly premium bills and includes an addressed return envelope with the bill.

(d)

The individual must—

(1)

Send a check or money order that is drawn payable to “CMS Medicare Insurance” and show the enrollee's name and claim number as it appears on the Medicare card; and

(2)

Return the bill with the check or money order in the preaddressed envelope.

Notes, amendments, and revision history

Authority

Authority: 42 U.S.C. 1302 and 1395hh.

Source

Source: 52 FR 48115, Dec. 18, 1987, unless otherwise noted.

§408.62. Initial and subsequent billings.

42 C.F.R. § 408.62

(a)

Monthly billing.

(1)

The first premium bill is for the period from the first month of coverage (or the first month of change from deduction or State buy-in payment) through the end of the first month after the month of billing.

(2)

Subsequent billings are for periods of one month.

(b)

Quarterly billing.

(1)

The first premium bill is for the period from the first month of coverage (or of change from deduction or State buy-in payment) through the third month after the month of billing.

(2)

Subsequent billings are for periods of three months.

Notes, amendments, and revision history

Authority

Authority: 42 U.S.C. 1302 and 1395hh.

Source

Source: 52 FR 48115, Dec. 18, 1987, unless otherwise noted.

§408.63. Billing procedures when monthly benefits are less than monthly premiums.

42 C.F.R. § 408.63

If monthly benefits are less than monthly premiums, the following procedures apply:

(a)

Notice of amount due. At the beginning of SMI entitlement, and at the beginning of each succeeding calendar year, SSA—

(1)

Notifies the enrollee of the amount of benefits payable for the rest of the year and the total premiums due for those same months; and

(2)

Bills the enrollee for the difference.

(b)

Notice of amount overdue. At the beginning of each succeeding calendar year, SSA—

(1)

Notifies the enrollee of any amounts overdue for premiums for the preceding calendar year; and

(2)

Indicates that if the amount still overdue on April 30 is equal to or greater than the premium for 3 months, SMI coverage will terminate on that date.

Notes, amendments, and revision history

Authority

Authority: 42 U.S.C. 1302 and 1395hh.

Source

Source: 52 FR 48115, Dec. 18, 1987, unless otherwise noted.

§408.65. Payment options.

42 C.F.R. § 408.65

(a)

The enrollee is not asked to pay premiums at the time of enrollment but is instructed to pay them upon receipt of a premium bill from CMS or its agents.

(b)

However, if the enrollee wishes, he or she may pay from one to 12 months or from one to four quarters at the time of enrollment.

Notes, amendments, and revision history

Authority

Authority: 42 U.S.C. 1302 and 1395hh.

Source

Source: 52 FR 48115, Dec. 18, 1987, unless otherwise noted.

§408.68. When premiums are considered paid.

42 C.F.R. § 408.68

(a)

Payment by check. The premium is considered paid if the check is paid by the bank the first or second time it is presented for payment.

(b)

Payment within the grace period.

(1)

A premium is considered paid within the grace period if it is delivered personally, or mailed on or before the last day of that period.

(2)

A premium payment is considered to have been mailed 7 days before it is received by CMS.

Notes, amendments, and revision history

Authority

Authority: 42 U.S.C. 1302 and 1395hh.

Source

Source: 52 FR 48115, Dec. 18, 1987, unless otherwise noted.

§408.70. Change from quarterly to monthly payments.

42 C.F.R. § 408.70

If an enrollee requests change from quarterly to monthly payment—

(a)

If the enrollee is paid up under the quarterly cycle, the first monthly bill is for one month.

(b)

If the enrollee is not paid up under the quarter system, the first bill includes all premiums due.

Notes, amendments, and revision history

Authority

Authority: 42 U.S.C. 1302 and 1395hh.

Source

Source: 52 FR 48115, Dec. 18, 1987, unless otherwise noted.

§408.71. Change from deduction or State payment to direct remittance.

42 C.F.R. § 408.71

(a)

Basis for change. An SMI enrollee is required to pay by direct remittance in any of the following circumstances:

(1)

The enrollee's entitlement to social security or railroad retirement benefits ends for any reason other than death.

(2)

The premiums can no longer be deducted from the civil service annuity of the enrollee or the enrollee's spouse.

(3)

The enrollee no longer qualifies for coverage under a State buy-in agreement, and is not entitled to social security or railroad retirement monthly benefits.

(b)

Billing. When any of the events specified in paragraph (a) of this section occurs (or as soon thereafter as possible), CMS or its agents bill the enrollee for direct remittance, in accordance with this subpart.

Notes, amendments, and revision history

Authority

Authority: 42 U.S.C. 1302 and 1395hh.

Source

Source: 52 FR 48115, Dec. 18, 1987, unless otherwise noted.

§408.80. Basic rules.

42 C.F.R. § 408.80

(a)

Sources of group payment. An employer, a lodge, union, or other organization may pay SMI premiums on behalf of one or more enrollees.

(b)

Informal arrangement. Enrollees may turn over their premium notices to their employer, union, lodge, or other organization and that organization may send a single payment (with the premium notices attached so that the payments can readily be identified with the appropriate enrollees) to the CMS Premium Collection Center. Prompt payment is essential since SMI coverage terminates if premiums are not paid by the end of the grace period.

(c)

Group billing arrangement. CMS may send a single notice for the premiums due from a group of enrollees if the following conditions are met:

(1)

The group payer—

(i)

Uses funds other than the enrollees' to pay all or a substantial part of the premiums; or

(ii)

Deducts the premiums from periodic payments it makes to the enrollees in the group.

(2)

The enrollee's rights are protected and enrollees are not required to pay the costs of having their premiums paid on a group basis.

Notes, amendments, and revision history

Authority

Authority: 42 U.S.C. 1302 and 1395hh.

Source

Source: 52 FR 48115, Dec. 18, 1987, unless otherwise noted.

§408.82. Conditions for group billing.

42 C.F.R. § 408.82

CMS agrees to a group billing arrangement only if the following conditions are met:

(a)

Conditions the group payer must meet. The group payer submits a written request for group billing—

(1)

Showing that all or part of the payments are made from the payer's funds or from funds due the enrollees and in the payer's possession; and

(2)

Agreeing not to charge the enrollees for the service of paying the premiums or for the administrative costs such as recordkeeping and postage.

(b)

Enrollees eligible for group payment.

(1)

Group payment may be made only on behalf of individuals who are already enrolled and are being billed for direct remittance.

(2)

Group payment may not be made for enrollees whose premiums are being deducted from monthly benefits in accordance with Subpart C of this part or being paid by the State under a buy-in agreement.

(c)

Protection of enrollee's rights. The use of group billing must not jeopardize the enrollees' right—

(1)

To confidentiality of personal information;

(2)

To terminate enrollment;

(3)

To resume individual payment of premiums if he or she wishes; and

(4)

To receive notice of any action that affects the SMI benefits.

(d)

Authorization by the enrollee.

(1)

To ensure maximum feasible protection of the rights specified in paragraph (c) of this section, each enrollee must give written authorization as specified in § 408.84(a)(2).

(2)

A group payer that is not an entity of State or local government must submit all enrollee authorizations to CMS.

(3)

A group payer that is an entity of State or local government may retain the authorizations and certify to CMS that it has on file an authorization for each enrollee included in the group.

(4)

It is on the basis of the enrollee's authorization that CMS sends the group payer information about each enrollee, as necessary to carry out the group payment function.

(e)

Size of group. The number of enrollees must be at least 20, which is the minimum size sufficient to make group billing efficient. (Smaller groups may use the informal procedure described in § 408.80(b).)

Notes, amendments, and revision history

Authority

Authority: 42 U.S.C. 1302 and 1395hh.

Source

Source: 52 FR 48115, Dec. 18, 1987, unless otherwise noted.

§408.84. Billing and payment procedures.

42 C.F.R. § 408.84

(a)

Initial premium notice.

(1)

CMS or its agent always sends the initial premium notice to the enrollee.

(2)

An enrollee who wishes to have the premiums paid on a group basis must give the notice to the group payer, along with written authorization for sending subsequent notices to the group payer and for release of the information required for the group payment process.

(b)

Monthly billings. Group premiums are billed on a monthly basis. However, the group payer may pay up to 12 months in advance.

(c)

Group payers must make their payments within 30 days after billing, to avoid infringing on the 90-day grace period during which the premiums may be paid by the enrollee if he or she is dropped from the group.

(d)

Effect of group payment. Payment by a group payer is considered payment by the enrollee.

Notes, amendments, and revision history

Authority

Authority: 42 U.S.C. 1302 and 1395hh.

Source

Source: 52 FR 48115, Dec. 18, 1987, unless otherwise noted.

§408.86. Responsibilities under group billing arrangement.

42 C.F.R. § 408.86

(a)

Enrollee responsibilities.

(1)

The enrollee is still responsible for premium payments; the group payer simply acts as his agent. If the agent fails to pay, or identifies the payment incorrectly, SSA notifies both the agent and the enrollee that the enrollee's account is delinquent. If an enrollee fails to take action on that notice, entitlement is terminated for nonpayment of premiums.

(2)

The enrollee must promptly notify both SSA and the group payer of any change of address.

(b)

Group payer's responsibilities. The group payer must—

(1)

Make premium payments promptly upon receipt of notices;

(2)

Promptly notify both CMS and the enrollee when it drops an enrollee from the group;

(3)

Make payments in a way that facilitates efficient and economical processing; and

(4)

Maintain the confidentiality of the personal information obtained from CMS for the group payment process.

(c)

CMS responsibilities. CMS—

(1)

Sends the bill to the group payer upon authorization from the enrollee;

(2)

Notifies both the payer and the enrollee if the payer fails to make timely payments; and

(3)

Refunds excess premiums in accordance with § 408.88.

Notes, amendments, and revision history

Authority

Authority: 42 U.S.C. 1302 and 1395hh.

Source

Source: 52 FR 48115, Dec. 18, 1987, unless otherwise noted.

§408.88. Refund of group payments.

42 C.F.R. § 408.88

(a)

Basis for refund. Group payments are refunded only in the following circumstances:

(1)

The premium was for a month after the month in which the enrollee's SMI coverage terminated or the enrollee died.

(2)

The premium was for a month after the month in which the group payer gave notice (before the 26th day of that month) that the enrollee was no longer eligible for group payment and was being dropped from the group.

(b)

Example. F is the wife of J who is a retiree of Corporation X. That corporation pays premiums on behalf of all of its retirees and their dependents. F obtains a divorce from J on October 20 and thus disqualifies herself for further premium payments by the corporation. The corporation gives notice on November 10 that a refund is due because F has been dropped from the list of persons for whom it has agreed to pay premiums. The premium paid for December would be refunded to the group payer.

(c)

To whom refund is made.

(1)

CMS ordinarily refunds to the group payer the premiums specified in paragraph (a) of this section.

(2)

However, if CMS has information that clearly shows those premiums were paid from the enrollee's funds, it sends the refund to the enrollee.

Notes, amendments, and revision history

Authority

Authority: 42 U.S.C. 1302 and 1395hh.

Source

Source: 52 FR 48115, Dec. 18, 1987, unless otherwise noted.

§408.90. Termination of group billing arrangement.

42 C.F.R. § 408.90

(a)

A group billing arrangement may be terminated either by the group payer or by CMS upon 30 days' notice.

(b)

CMS may terminate the arrangement if it finds that the group payer is not acting in the best interest of the enrollees or that, for any other reason, the arrangement has proved inconvenient for CMS.

Notes, amendments, and revision history

Authority

Authority: 42 U.S.C. 1302 and 1395hh.

Source

Source: 52 FR 48115, Dec. 18, 1987, unless otherwise noted.

§408.92. Change from group payment to deduction or individual payment.

42 C.F.R. § 408.92

(a)

Enrollee excluded from group payment arrangement because of entitlement to monthly benefits.

(1)

When an enrollee becomes entitled to monthly benefits from which premiums can be deducted as specified in subpart C of this part, CMS notifies the group payer to discontinue payment for that enrollee.

(2)

In order to maintain confidentiality, CMS does not explain to the group payer the reason for excluding the enrollee from the group payment arrangement.

(3)

The enrollee's premiums are thereafter deducted from the monthly benefits, in accordance with subpart C of this part.

(b)

Enrollee no longer eligible for the group.

(1)

When an enrollee is no longer eligible to be included in the group (for instance because he or she is no longer employed by the group payer or has terminated union or lodge membership), the group payer must promptly notify CMS and the enrollee.

(2)

CMS or its agents resume sending individual bills to the enrollee, for direct remittance subject to the grace period and termination dates specified in § 408.8.

Notes, amendments, and revision history

Authority

Authority: 42 U.S.C. 1302 and 1395hh.

Source

Source: 52 FR 48115, Dec. 18, 1987, unless otherwise noted.