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MA-PD and PDP sponsors have the option to retain dually eligible enrollees and individuals who qualify for the low-income subsidy (LIS) who fail to pay premiums even if the plan has a policy to disenroll individuals for nonpayment of premiums, see § 60.3.1.3 for more information.

Disenrollment for failure to pay plan premiums is optional for each plan; however, plans must apply disenrollment policies consistently across all enrollees, including applying a consistent grace period of no less than two whole calendar months. During the calendar year plans may choose to increase the length of the initial grace period or establish a policy of not disenrolling individuals for failure to pay the plan premium as long as the new policy is applied consistently to all enrollees from that date forward.

Example: A natural disaster affects three counties within a plan that services 10 counties. The plan increases their two-month grace period to six months to ease the burden for individuals affected by the natural disaster. The plan must provide this extended grace period to all enrollees in the PBP and not only those in the area affected by the natural disaster. The organization must report any changes to its policy for disenrollment for failure to pay premiums to its CMS account manager before implementing such changes.

Plans may not disenroll individuals who are considered to be in premium withhold status by CMS. Individuals who have requested premium withhold are considered to remain in premium withhold status until either:

• CMS notifies the organization that the premium-withhold request was rejected, failed, or been unsuccessful, or • The enrollee requests to be billed directly.

Once the enrollee is considered to be in “direct bill” status, the plan must notify the enrollee of the premium owed and provide the appropriate grace period, as described below prior to disenrolling the individual.

However, even if an enrollee’s premium payment status has been changed to “direct bill,” if the enrollee can demonstrate that SSA or the Railroad Retirement Board (RRB) has withheld Part C and/or Part D premiums during the coverage month(s) in question, the enrollee will be considered to remain in premium withhold status. The individual cannot be disenrolled for failure to pay premium(s), whether or not the organization actually receives these premiums on a timely basis since by selecting the premium withhold option, the enrollee is deemed to have made a payment to the plan.

Example – Incorrect Continuation of Premium Withhold: An individual was enrolled in Plan A and selected premium withhold. The individual subsequently enrolls in Plan B and does not select premium withhold. Upon receiving a direct bill from Plan B, the individual provides Plan B with proof that a premium deduction continues from their SSA benefit check. Since the enrollee provided Plan B with evidence that a premium amount is currently being deducted from his check, Plan B