[Code of Federal Regulations]
[Title 42, Volume 2]
[Revised as of October 1, 2002]
From the U.S. Government Printing Office via GPO Access
[CITE: 42CFR408.110]

[Page 211-212]
 
                         TITLE 42--PUBLIC HEALTH
 
                             HUMAN SERVICES
 
PART 408--PREMIUMS FOR SUPPLEMENTARY MEDICAL INSURANCE--Table of Contents
 
  Subpart G--Collection of Unpaid Premiums; Refund of Excess Premiums 
                     After the Death of the Enrollee
 
Sec. 408.110  Collection of unpaid premiums.


    (a) Basis and scope--(1) Basis. Under the Federal Claims Collection 
Act of 1966 (31 U.S.C. 3711), CMS is required to collect any debts due 
it but is authorized to suspend or terminate collection action on debts 
of less than $20,000 when certain conditions are met. (See 4 CFR, parts 
101-105 for general rules implementing the Federal Claims Collection 
Act.) As indicated in Sec. 408.4, unpaid premiums are debts owed the 
Federal government by the enrollee or the enrollee's estate.
    (2) Scope. This section sets forth the methods of collection used by 
CMS and the circumstances under which CMS terminates or renews 
collection action. The regulations in this section apply to

[[Page 212]]

hospital insurance premiums as well as SMI premiums.
    (b) Collection of unpaid premiums. Generally, CMS will attempt to 
collect unpaid premiums by one of the following methods:
    (1) By billing enrollees who pay the premiums directly to CMS or to 
a designated agent in accordance with Sec. 408.60.
    (2) By deduction from any benefits payable to the enrollee or the 
estate of a deceased enrollee under Title II or XVIII of the Social 
Security Act, the Railroad Retirement Act or any act administered by the 
Office of Personnel Management in accordance with Sec. 408.4(b) and 
Subpart C of this part (Deduction from Monthly Benefits); or
    (3) By billing the estate of a deceased enrollee.
    (c) Termination of collection action. CMS terminates collection 
action on unpaid premiums under either of the following circumstances, 
if the cost of collection exceeds the amount of overdue premiums:
    (1) The individual is not entitled to benefits under the Acts listed 
in paragraph (b)(2) of this section, is not currently enrolled for SMI 
or premium hospital insurance, and demonstrates, to CMS's satisfaction, 
that he or she is unable to pay the debt within a reasonable time.
    (2) The individual has been dead more than 27 months (the maximum 
time allowed for claiming SMI benefits), and the legal representative of 
his or her estate demonstrates, to CMS's satisfaction, that the estate 
is unable to pay the debt within a reasonable time.
    (d) Renewal of collection efforts. CMS renews collection efforts in 
either of the following circumstances, if the cost of collection does 
not exceed the amount of the overdue premiums:
    (1) The individual enrolls again for premium hospital insurance or 
SMI. (Payment of overdue premiums is not a prerequisite for 
reenrollment.)
    (2) The individual becomes entitled or reentitled to social security 
or railroad retirement benefits or a Federal civil service annuity.