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disenrollment (see Exhibit 19) whenever payment of at least one month of premiums is received during the grace period. The notice includes the new disenrollment date and should be sent within 15 calendar days of the date the premium was due.

Example: Plan XY has decided to offer a two-month grace period for nonpayment of plan premiums and has chosen the “rollover” approach to calculate the grace period. The plan bills Mr. Smith in December for the January premium. Mr. Smith fails to pay his January premium due January 1. The plan sends a notice to him on January 7 stating that his coverage will be terminated if the outstanding premium is not paid within the grace period. The notice advises him that his termination date would be March 1 (end of the two-month grace period). Mr. Smith then pays the January premium prior to the end of the two-month grace period (February 28), but does not pay the February premium, which the enrollee was billed for in January. A new two-month grace period is established which begins on the first of the next month for which the premium is unpaid (February 1). On February 9, the plan sends a notice to Mr. Smith reflecting the new grace period and the new anticipated termination date of April 1. The enrollee pays the premium for February before the grace period expires (April 1); therefore, the enrollee’s coverage in the plan remains intact.

60.3.1.3 – Optional Exception for Dual-Eligible Individuals and Individuals who Qualify for the Low-Income Subsidy

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. For MA-only plans, organizations may retain individuals who are dually eligible for both Medicare and Medicaid.

If the MAO or Part D sponsor offers this option in one of its plans, it must apply the policy to all such individuals in that plan.

CMS requires plans to provide enrollees advance notice of this policy, and any yearly changes to the policy. Plans have the discretion as to how it will notify its enrollees (e.g., in an upcoming newsletter or other member mailing, such as the Annual Notice of Change). CMS recommends a general statement in such notifications to avoid confusing other enrollees for whom this policy does not apply.

Example: “If you have Medicaid or extra help in paying for your Medicare prescription drugs and are having difficulty paying your plan premiums or cost sharing, please contact us.”

A plan must report any changes to its policy for disenrollment for failure to pay premiums to its CMS account manager before implementing such changes.