[Federal Register Volume 61, Number 150 (Friday, August 2, 1996)]
[Rules and Regulations]
[Pages 40343-40347]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-19558]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Health Care Financing Administration

42 CFR Parts 406, 407, 408, and 416

[BPD-752-FC]
RIN 0938-AH33


Medicare Program: Special Enrollment Periods and Waiting Period

AGENCY: Health Care Financing Administration (HCFA), HHS.

ACTION: Final rules with comment period.

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SUMMARY: These rules provide an additional way for certain disabled 
individuals under age 65 to qualify for special enrollment periods 
(SEPs); extend from 1991 through 1998 the period during which certain 
disabled individuals under age 65 who are covered under large group 
health plans (LGHPs) may qualify for SEPs; and make clear that a second 
24-month waiting period is not required for disability-based 
reentitlement if the current impairment is the same as, or directly 
related to, the impairment on which the previous period of entitlement 
was based.
    The changes made by these rules conform the HCFA regulations to 
certain provisions of the Omnibus Budget Reconciliation Acts of 1987, 
1989, 1990, and 1993 (commonly referred to as OBRA '87, OBRA '89, OBRA 
'90, and OBRA '93, respectively), and the Social Security Act (SSA) 
Amendments of 1994 (Pub. L. 103-432).
    In OBRA '93, Congress amended section 1862(b) of the Social 
Security Act (the Act), to extend through September 30, 1998 the 
Medicare Secondary Payer (MSP) provisions for disabled beneficiaries. 
Congress did not make a conforming amendment to section 1837(i) of the 
Act, which authorizes SEPs for disabled beneficiaries who stop working. 
However, the SSA Amendments of 1994 made the conforming change to 
section 1837(i), retroactive to the OBRA '93 effective date.
    The purpose of the special enrollment period amendments is to 
ensure that a disabled individual under age 65 who meets the conditions 
for enrollment in Medicare Part B will be able to enroll as soon as his 
or her group health plan coverage based on current employment ends; and 
to extend until September 30, 1998 the protection afforded by the 
special enrollment periods to disabled individuals covered under LGHPs.

DATES: Effective date: These rules are effective on September 3, 1996.
    Comment date: We will consider comments received by October 1, 
1996.

ADDRESSES: Please mail original and 3 copies of your comments to the 
following address: Health Care Financing Administration, Department of 
Health and Human Services, Attention: BPD-752-FC, P.O. Box 26688, 
Baltimore, Maryland 21207.
    If you prefer, you may deliver original and 3 copies of your 
comments to either of the following addresses:

Room 309-G, 200 Independence Avenue, S.W., Washington, DC 20201,
Room C5-09-26, 7500 Security Boulevard, Baltimore, Maryland 21244-1850.

    Because of staffing and resource limitations, we cannot accept 
comments by facsimile (FAX) transmission. In commenting, please refer 
to file code BPD-752-FC. Comments received timely will be available for 
public inspection as they are received, generally beginning 
approximately 3 weeks after publication of a document, in Room 309-G of 
the Department's offices at 200 Independence Avenue, SW., Washington, 
DC on Monday through Friday of each week from 8:30 a.m. to 5 p.m. 
(Phone: (202) 690-7890).
    Although we cannot respond to individual comments, if we revise 
these rules as a result of comments, we will discuss all timely 
comments in the preamble to the revised rules.

FOR FURTHER INFORMATION CONTACT: Margaret Jefferson, (410) 786-4482.

SUPPLEMENTARY INFORMATION:

I. Background

A. Amendments to the Statute: Special Enrollment Periods and Waiting 
Period

    1. Section 4033 of OBRA '87 (Pub. L. 100-203) amended section 
226(f) of the Act to provide that, effective as of March 1988, a second 
24-month waiting period is not required for disability-based 
reentitlement if the current impairment is the same as, or directly 
related to, the impairment on which the

[[Page 40344]]

previous period of entitlement was based.
    2. Section 6202(c) of OBRA '89 (Pub. L. 101-239) amended section 
1837(i) of the Act to provide, effective July 1, 1990, an additional 
way for certain disabled individuals under age 65 to qualify for a SEP. 
Before enactment of this amendment, a disabled ``active individual'' 
could qualify for a SEP only if he or she was covered (directly or as 
part of the family of another covered individual) under a large group 
health plan (LGHP). (The statute defined ``active individual'' as ``an 
employee (as may be defined in regulations), the employer, self-
employed individual (such as the employer) an individual associated 
with the employer in a business relationship, or a member of the family 
of any such person''). An LGHP is a plan of an employer of 100 or more 
employees or of a group of employers at least one of which has 100 or 
more employees. Under the amendment, a disabled individual can also 
qualify for a SEP under the rules that previously applied only to an 
individual age 65 or over, that is, by having been covered under a 
group health plan (GHP) on the basis of his or her own employment or 
that of a spouse. This rule applies regardless of the number of 
employees an employer has. However, since the SEP qualification 
provisions for individuals age 65 or over refer specifically to the 
plan of the individual or the individual's spouse, this additional way 
of qualifying for a SEP is not available to a child or other family 
member who is disabled. Those individuals qualify for SEPs only if 
covered under an LGHP.
    3. Section 4203(b) of OBRA '90 (Public Law 101-508) and section 
13561(b) of OBRA '93 (Public Law 103-66) amended section 
1862(b)(1)(B)(iii) of the Act to change, first from December 31, 1991 
to September 30, 1995, and then to September 30, 1998, the termination 
date of the MSP provisions for the disabled. Moreover, sections 
13561(e)(1)(E) and (e)(1)(F) of OBRA '93 amended section 
1862(b)(1)(B)(i) of the Act to eliminate the ``active individual'' 
language. Before this amendment, ``active individual'' identified the 
beneficiaries to whom the MSP provisions applied. Because of this 
change to the ``current employment'' criterion, Medicare is secondary 
payer for a disabled beneficiary who is under age 65 and who is covered 
under an LGHP--
     Through August 9, 1993, as a disabled ``active 
individual''; and
     From August 10, 1993 through September 1998, ``by virtue 
of the individual's current employment status with an employer''.
    Section 1862(b)(1)(B) of the Act establishes October 1, 1998 as the 
sunset date of the MSP provisions for disabled individuals. As noted 
above, section 1837(i) of the Act, which pertains to SEPs, was amended 
by the SSA Amendments of 1994 to conform to section 1862(b(1)(B) of the 
Act. Since the availability of SEPs to disabled individuals depends 
upon the existence of section 1862(b)(1)(B) of the Act, we have 
interpreted that the October 1, 1998 sunset date in that section 
applies also to those SEP provisions. (The MSP provisions for the aged, 
set forth at section 1862(b)(1)(A) of the Act have no sunset date.)
    4. Section 147(f) of the Social Security Amendments of 1994 (Pub. 
L. 103-432).
     Amended section 1837(i)(3) of the Act so that a SEP may 
begin earlier and last longer; and
     Amended section 1838(e) of the Act to provide options for 
the beginning of Medicare coverage that is based on enrollment during 
specified months of a SEP.
    Under the section 1837 amendment--
     Instead of beginning on the first day of the first month 
during which the individual is no longer enrolled in a GHP or LGHP on 
the basis of current employment status, the SEP may include each month 
during any part of which the individual is so enrolled; and
     Instead of ending ``seven months later'', the SEP ends on 
the last day of the eighth consecutive month in which the individual is 
no longer so enrolled.
    Under the section 1838 amendment, with respect to the beginning of 
coverage--
     For one who enrolls in Medicare in a month during any part 
of which he or she is enrolled in a GHP or LGHP on the basis of current 
employment status, or the first full month when not so enrolled, 
Medicare coverage begins on the first day of the month of enrollment 
or, at the option of the individual, on the first day of any of the 
following three months.
     For one who enrolls in any other month of the SEP, there 
is no change: Medicare coverage begins on the first day of the month 
following the month of enrollment.

B. Conforming Changes in the Regulations: Special Enrollment Periods 
and Waiting Period

    1. To reflect the statutory changes discussed above, we have made 
the following changes:
     Added a new paragraph (b)(3) to Sec. 406.12, to specify 
that a second 24-month waiting period is not required for reentitlement 
to hospital insurance benefits if the previous period of entitlement 
ended on or after March 1, 1988 and the current impairment is the same 
as, or directly related to, the impairment on which the previous period 
of entitlement was based.
     Revised Sec. 407.20(d) to set forth the new rule under 
which a disabled individual may qualify for a SEP if he or she had GHP 
coverage on the basis of the current employment of the individual or 
the individual's spouse, and to restate the rule for those who must 
qualify on the basis of LGHP coverage.
     Revised Sec. 407.20(f) to specify the beginning date of a 
SEP for a disabled individual who had GHP coverage on the basis of 
current employment.
     Revised Sec. 408.24(a)(8)(i) to change ``January 1992'' to 
``October 1998'' and add a new paragraph (a)(9) to specify the months 
excluded in computing Medicare Part B premium increases (for late 
enrollment or reenrollment) for disabled individuals who had GHP 
coverage on the basis of current employment. The revisions to 
Sec. 408.24(a)(8)(i) reflect the extension of the MSP provisions for 
the disabled. The new paragraph 408.24 (a)(9) is needed because the 
OBRA '89 amendment that extended the SEP provisions to disabled 
beneficiaries covered under a GHP (as distinguished from an LGHP) was 
effective July 1990.

C. Technical and Clarifying Changes

    1. In Sec. 406.6, we have amended paragraph (b) to clarify that an 
individual who is under age 65 and has been entitled, for more than 24 
months, to monthly social security or railroad retirement benefits 
based on disability is also (in addition to those currently identified 
in the paragraph) automatically entitled to Medicare Part A without 
filing an application. This provision is part of section 226(b) of the 
Act and, through an oversight, this provision had not been reflected in 
our regulations.
    2. Paragraph (e) of Sec. 406.21, revised to reflect the statutory 
changes that affect SEPs, is redesignated as a new Sec. 406.24.
    3. In Sec. 407.20(a), we have made the following changes:
     Removed the definitions and replaced them with reference 
to the definitions in Part 411 of the HCFA rules.
     Used the initials ``GHP'' and ``LGHP'' wherever 
appropriate.
     Explained, under paragraph (a)(1) why the ``former 
employee'' language of the Sec. 411.101 definitions of GHP and LGHP 
does not apply with respect to SEPs.

[[Page 40345]]

    4. In Sec. 407.25, we have revised paragraph (c) to remove the 
current outdated content on beginning of entitlement and referenced new 
Sec. 406.24. This new section incorporates the statutory changes that 
pertain to SEPs and apply to Medicare Part B as well as Medicare Part 
A.
    5. In Sec. 408.24(a), we have--
     Corrected the cross-reference to Sec. 405.340, which has 
been redesignated as Sec. 411.170.
     Used the initials ``GHP'' and ``LGHP'' wherever 
appropriate.
     Referenced the definitions in Secs. 411.101, 411.104, and 
411.201 of the HCFA regulations, which incorporate the Internal Revenue 
Code language.
     Removed references to Public Laws because reference to the 
implementing rules provides more precise guidance and is sufficient.
    6. We have also taken advantage of this opportunity to make minor 
technical and editorial changes that we overlooked when Sec. 416.35, 
which pertains to ambulatory surgical centers, was amended.

II. Waiver of Proposed Rulemaking

    We ordinarily publish a notice of proposed rulemaking in the 
Federal Register and invite public comment. The Notice describes the 
terms and substance of the proposed rules and references the legal 
authority under which they are proposed. However, this procedure may be 
waived if the agency finds that notice and public comment rulemaking is 
impracticable, unnecessary, or contrary to the public interest.
    These rules conform HCFA regulations to statutory amendments that 
are already in effect. Publication of these conforming amendments will 
ensure better understanding of beneficiary rights, but will have no 
fiscal or program impact. The technical and clarifying amendments make 
no substantive changes in the rules. For these reasons, we find that 
notice and opportunity for comment are unnecessary and that there is 
good cause to waive notice of proposed rulemaking procedures.
    However, as indicated above under DATES, we will consider timely 
comments from anyone who believes that the conforming changes go beyond 
what the statute requires or permits, or that any of the technical 
amendments affect the substance of the rules.

III. Regulatory Impact Statement

    Consistent with the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 
through 612), we prepare a regulatory flexibility analysis for each 
rule unless the Secretary certifies that it will not have a significant 
economic impact on a substantial number of small entities. States and 
individuals are not included in the definition of small entities.
    In addition, section 1102(b) of the Act requires the Secretary to 
prepare a regulatory impact analysis if a rule may have a significant 
impact on the operations of a substantial number of small rural 
hospitals. This analysis must conform to the provisions of section 604 
of the RFA. For purposes of section 1102(b) of the Act, we define a 
small rural hospital as a hospital that is located outside of a 
Metropolitan Statistical Area and has fewer than 50 beds.
    These rules conform the HCFA regulations to certain provisions of 
OBRA '87, OBRA '89, OBRA '90, OBRA '93, and the Social Security Act 
Amendments of 1994. The statutory effective dates of these provisions 
have already passed and the changes are already in effect.
    These amendments to the regulations will have no fiscal or program 
impact. We are not preparing analyses for either the RFA or section 
1102(b) of the Act because we have determined, and the Secretary 
certifies, that these rules will not have a significant economic impact 
on a substantial number of small entities or a significant impact on 
the operation of a substantial number of small rural hospitals.
    We have reviewed these rules and determined that, under the 
provisions of Public Law 104-121, they are not major rules.
    In accordance with the provisions of Executive Order 12866, these 
final rules with comment period were not reviewed by the Office of 
Management and Budget.

IV. Paperwork Reduction Act

    These rules contain no information collection requirements subject 
to review by the Office of Management and Budget under the Paperwork 
Reduction Act.

List of Subjects

42 CFR Part 406

    Health Facilities, Kidney diseases, Medicare.

42 CFR Part 407

    Medicare.

42 CFR Part 408

    Medicare.

42 CFR Part 416

    Health facilities, Kidney diseases, Medicare, Reporting and 
recordkeeping requirements.

    42 CFR Chapter IV is amended as follows:
    A. Part 406 is amended as set forth below:

PART 406--HOSPITAL INSURANCE ELIGIBILITY AND ENTITLEMENT

    1. The authority citation for Part 406 continues to read as 
follows:

    Authority: Secs. 1102 and 1871 of the Social Security Act (42 
U.S.C. 1302 and 1395hh), unless otherwise noted.

    2. Section 406.6 is amended to revise paragraph (b) to read as 
follows:


Sec. 406.6  Application or enrollment for hospital insurance.

* * * * *
    (b) Individuals who need not file an application for hospital 
insurance. An individual who meets any of the following conditions need 
not file an application for hospital insurance:
    (1) Is under age 65 and has been entitled, for more than 24 months, 
to monthly social security or railroad retirement benefits based on 
disability.
    (2) At the time of attainment of age 65, is entitled to monthly 
social security or railroad retirement benefits.
    (3) Establishes entitlement to monthly social security or railroad 
retirement benefits at any time after attaining age 65.
    3. Section 406.12(b) is amended to remove footnote ``1'', revise 
the introductory text, remove the semicolon and the word ``or'' from 
the end of paragraph (b)(1) and insert a period in its place, and add a 
new paragraph (b)(3), to read as follows:


Sec. 406.12  Individual under age 65 who is entitled to social security 
or railroad retirement disability benefits.

* * * * *
    (b) Previous periods of disability benefits entitlement. Months of 
a previous period of entitlement or deemed entitlement to disability 
benefits count toward the 25-month requirement if any of the following 
conditions is met:
* * * * *
    (3) The previous period ended on or after March 1, 1988 and the 
current impairment is the same as, or directly related to, the 
impairment on which the previous period of entitlement was based.
* * * * *
    4. In Sec. 406.21, paragraph (e) is removed and reserved.
    5. A new Sec. 406.24 is added, to read as follows:

[[Page 40346]]

Sec. 406.24  Special enrollment period.1
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    \1\ Before August 1986, SEPs were available only for enrollment 
in supplementary medical insurance, not for enrollment in premium 
hospital insurance.
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    (a) Terminology. As used in this subpart, the following terms have 
the indicated meanings.
    (1) Current employment status has the meaning given this term in 
Sec. 411.104 of this chapter.
    (2) Family member has the meaning given this term in Sec. 411.201 
of this chapter.
    (3) Group health plan (GHP) and large group health plan (LGHP) have 
the meanings given those terms in Sec. 411.101 of this chapter, except 
that the ``former employee'' language of those definitions does not 
apply with respect to SEPs because--
    (i) Section 1837(i)(1)(A) of the Act explicitly requires that GHP 
coverage of an individual age 65 or older, be by reason of the 
individual's (or the individual's spouse's) current employment status; 
and
    (ii) The sentence following section 1837(i)(1)(B), of the Act 
refers to ``large group health plan''. Under section 1862(b)(1)(B)(i), 
as amended by OBRA '93, LGHP coverage of a disabled individual must be 
``by virtue of the individual's or a family member's current employment 
status with an employer''.
    (4) Special enrollment period (SEP) is a period provided by statute 
to enable certain individuals to enroll in Medicare without having to 
wait for the general enrollment period.
    (b) Duration of SEP.2 (1) The SEP includes any month during 
any part of which--
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    \2\ Before March 1995, SEPs began on the first day of the first 
month the individual was no longer covered under a GHP or LGHP by 
reason of current employment status.
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    (i) An individual over age 65 is enrolled in a GHP by reason of the 
current employment status of the individual or the individual's spouse; 
or
    (ii) An individual under age 65 and disabled--
    (A) Is enrolled in a GHP by reason of the current employment status 
of the individual or the individual's spouse; or
    (B) Is enrolled in an LGHP by reason of the current employment 
status of the individual or a member of the individual's family.
    (2) The SEP ends on the last day of the eighth consecutive month 
during which the individual is at no time enrolled in a GHP or an LGHP 
by reason of current employment status.
    (c) Conditions for use of a SEP.3 In order to use a SEP, the 
individual must meet the following conditions:
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    \3\ Before August 10, 1993, an individual under age 65 could 
qualify for a SEP only if he or she had LGHP coverage as an ``active 
individual'', which the statute defined as ``an employee, employer, 
self-employed individual (such as the employer), individual 
associated with the employer in a business relationship, or as a 
member of the family of any of those persons''.
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    (1) When first eligible to enroll for premium hospital insurance 
under Sec. 406.20(b) or (c), the individual was--
    (i) Age 65 or over and covered under a GHP by reason of the current 
employment status of the individual or the individual's spouse;
    (ii) Under age 65 and covered under an LGHP by reason of the 
current employment status of the individual or a member of the 
individual's family ; or
    (iii) Under age 65 and covered under a GHP by reason of the current 
employment status of the individual or the individual's spouse.
    (2) For all the months thereafter, the individual has maintained 
coverage either under hospital insurance or a GHP or LGHP.
    (d) Special rule: Additional SEPs. (1) Generally, if an individual 
fails to enroll during any available SEP, he or she is not entitled to 
any additional SEPs.
    (2) However, if an individual fails to enroll during a SEP, because 
coverage under the same or a different GHP or LGHP was restored before 
the end of that particular SEP, that failure to enroll does not 
preclude additional SEPs.
    (e) Effective date of coverage. (1) If the individual enrolls in a 
month during any part of which he or she is covered under a GHP or LGHP 
on the basis of current employment status, or in the first full month 
when no longer so covered, coverage begins on the first day of the 
month of enrollment or, at the individual's option, on the first day of 
any of the three following months.
    (2) If the individual enrolls in any month of the SEP other than 
the months specified in paragraph (e)(1) of this section, coverage 
begins on the first day of the month following the month of enrollment.
    B. Part 407 is amended as set forth below.

PART 407--SUPPLEMENTARY MEDICAL INSURANCE (SMI) ENROLLMENT AND 
ENTITLEMENT

    1. The authority citation for part 407 continues to read as 
follows:

    Authority: Secs. 1102 and 1871 of the Social Security Act (42 
U.S.C. 1302 and 1395hh).

    2. Section 407.20 is revised to read as follows:


Sec. 407.20  Special enrollment period related to coverage under group 
health plans.

    (a) Terminology--(1) Group health plan (GHP) and large group health 
plan (LGHP). These terms have the meanings given them in Sec. 411.101 
of this chapter except that the ``former employee'' language of those 
definitions does not apply with respect to SEPs for the reasons 
specified in Sec. 406.24(a)(3) of this chapter.
    (2) Special enrollment period (SEP). This term has the meaning set 
forth in Sec. 406.24(a)(4) of this chapter. In order to use a SEP, an 
individual must meet the conditions of paragraph (b) and of paragraph 
(c) or (d) of this section, as appropriate.
    (b) General rule. All individuals must meet the following 
conditions:
    (1) They are eligible to enroll for SMI on the basis of age or 
disability, but not on the basis of end-stage renal disease.
    (2) When first eligible for SMI coverage (4th month of their 
initial enrollment period), they were covered under a GHP or LGHP on 
the basis of current employment status or, if not so covered, they 
enrolled in SMI during their initial enrollment period; and
    (3) For all months thereafter, they maintained coverage under 
either SMI or a GHP or LGHP. (Generally, if an individual fails to 
enroll in SMI during any available SEP, he or she is not entitled to 
any additional SEPs. However, if an individual fails to enroll during a 
SEP because coverage under the same or a different GHP or LGHP was 
restored before the end of that particular SEP, that failure to enroll 
does not preclude additional SEPs.)
    (c) Special rule: Individual age 65 or over. For an individual who 
is or was covered under a GHP, coverage must be by reason of the 
current employment status of the individual or the individual's spouse.
    (d) Special rules: Disabled individual.4 Individuals entitled 
on the basis of disability (but not on the basis of end-stage renal 
disease) must meet conditions that vary depending on whether they were 
covered under a GHP or an LGHP.
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    \4\ Under the current statute, the SEP provision applicable to 
disabled individuals covered under an LGHP expires on September 
1998. Unless Congress changes that date, the last SEP available 
under those provisions will begin with June 1998.
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    (1) For a disabled individual who is or was covered under a GHP, 
coverage must be on the basis of the current employment status of the 
individual or the individual's spouse.
    (2) For a disabled individual who is or was covered under an LGHP, 
coverage must be as follows:
    (i) Before August 10, 1993, as an ``active individual'', that is, 
as an employee, employer, self-employed individual (such as the 
employer), individual associated with the employer

[[Page 40347]]

in a business relationship, or as a member of the family of any of 
those persons.
    (ii) On or after August 10, 1993, by reason of current employment 
status of the individual or a member of the individual's family.
    (e) Effective date of coverage. The rule set forth in 
Sec. 406.24(d) for Medicare Part A applies equally to Medicare Part B.
    3. In Sec. 407.25, paragraph (c) is revised to read as follows:


Sec. 407.25  Beginning of entitlement: Individual enrollment.

* * * * *
    (c) Enrollment or reenrollment during a SEP. The rules set forth in 
Sec. 406.24(d) of this chapter apply.
    C. Part 408 is amended as set forth below:

PART 408--SUPPLEMENTARY MEDICAL INSURANCE PREMIUMS

    1. The authority citation for Part 408 continues to read as 
follows:

    Authority: Secs. 1102 and 1871 of the Social Security Act (42 
U.S.C. 1302 and 1395hh).

    2. Section 408.24 is amended to republish the introductory text of 
paragraph (a), to revise paragraphs (a)(6), (a)(7), and (a)(8), to add 
a new paragraph (a)(9), and to revise paragraph (b)(2)(i), to read as 
follows:


Sec. 408.24  Individuals who enrolled or reenrolled before April 1, 
1981 or after September 30, 1981.

    (a) Enrollment. For an individual who first enrolled before April 
1, 1981 or after September 30, 1981, the period includes the number of 
months elapsed between the close of the individual's initial enrollment 
period and the close of the enrollment period in which he or she first 
enrolled, and excludes the following:
* * * * *
    (6) For premiums due for months beginning with September 1984 and 
ending with May 1986, the following:
    (i) Any months after December 1982 during which the individual 
was--
    (A) Age 65 to 69;
    (B) Entitled to hospital insurance (Medicare Part A); and
    (C) Covered under a group health plan (GHP) by reason of current 
employment status.
    (ii) Any months of SMI coverage for which the individual enrolled 
during a special enrollment period as provided in Sec. 407.20 of this 
chapter.
    (7) For premiums due for months beginning with June 1986, the 
following:
    (i) Any months after December 1982 during which the individual was:
    (A) Age 65 or over; and
    (B) Covered under a GHP by reason of current employment status.
    (ii) Any months of SMI coverage for which the individual enrolled 
during a special enrollment period as provided in Sec. 407.20 of this 
chapter.
    (8) For premiums due for months beginning with January 1987, the 
following:
    (i) Any months after December 1986 and before October 1998 during 
which the individual was:
    (A) A disabled Medicare beneficiary under age 65;
    (B) Not eligible for Medicare on the basis of end stage renal 
disease, under Sec. 406.13 of this chapter; and
    (C) Covered under an LGHP as described in Sec. 407.20 of this 
chapter.
    (ii) Any months of SMI coverage for which the individual enrolled 
during a special enrollment period as provided in Sec. 407.20 of this 
chapter.
    (9) For premiums due for months beginning with July 1990, the 
following:
    (i) Any months after December 1986 during which the individual met 
the conditions of paragraphs (a)(8)(i)(A) and (a)(8)(i)(B) of this 
section, and was covered under a GHP by reason of the current 
employment status of the individual or the individual's spouse.
    (ii) Any months of SMI coverage for which the individual enrolled 
during a special enrollment period as provided in Sec. 407.20 of this 
chapter.
    (b) * * *
    (2) * * *
    (i) The periods specified in paragraphs (a)(1) through (a)(9) of 
this section; and
* * * * *
    D. Part 416 is amended as set forth below.

PART 416--AMBULATORY SURGICAL SERVICES

    1. The authority citation for part 416 continues to read as 
follows:

    Authority: Secs. 1102 and 1871 of the Social Security Act (42 
U.S.C. 1302 and 1395hh).


Sec. 416.35  [Amended]

    2. In Sec. 416.35, the following changes are made:
    a. In paragraph (b)(1)(i), ``Sec. 416.39'' is revised to read 
``Sec. 416.26''.
    b. In the introductory text of paragraph (d), ``shall be given'' is 
revised to read ``is given''.

(Catalog of Federal Domestic Assistance Program No. 93.773, 
Medicare--Hospital Insurance and No. 93.774, Medicare--Supplementary 
Medical Insurance)

    Dated: July 26, 1996.
Bruce C. Vladeck,
Administrator, Health Care Financing Administration.
[FR Doc. 96-19558 Filed 8-1-96; 8:45 am]
BILLING CODE 4120-01-P