[Federal Register Volume 75, Number 249 (Wednesday, December 29, 2010)]
[Rules and Regulations]
[Pages 81843-81846]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-32848]


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SOCIAL SECURITY ADMINISTRATION

20 CFR Part 418

[Docket No. SSA-2010-0033]
RIN 0960-AH24


Amendments to Regulations Regarding Eligibility for a Medicare 
Prescription Drug Subsidy

AGENCY: Social Security Administration.

ACTION: Interim final rule with request for comments.

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SUMMARY: We are revising our regulations to incorporate changes to the 
Medicare prescription drug coverage low-income subsidy (Extra Help) 
program made by the Affordable Care Act which was enacted on March 23, 
2010. Under our interpretation of section 3304 of the Affordable Care 
Act and this interim final rule, if the death of a beneficiary's spouse 
would decrease or eliminate the subsidy provided by the Extra Help 
program, we will, based on a determination, or redetermination, extend 
the effective period of eligibility for the most recent determination 
or redetermination until 1 year after the

[[Page 81844]]

month following the month we are notified of the death of the spouse. 
These regulatory changes will allow us to implement this provision of 
the Affordable Care Act when it goes into effect on January 1, 2011. We 
are also revising our regulations to incorporate changes made by the 
Medicare Improvements for Patients and Providers Act of 2008 (MIPPA), 
which affect the way we account for income and resources when 
determining eligibility for the Extra Help program. The statute 
provides that we no longer count as a resource the value of any life 
insurance policy for Extra Help applications filed, or redeterminations 
that are effective, on or after January 1, 2010. In addition, we will 
no longer count as income the help a beneficiary receives when someone 
else provides food and shelter, or pays household bills for food, 
mortgage, rent, electricity, water, property taxes, or heating fuel or 
gas. These revisions will update our rules to reflect these statutory 
changes.

DATES: Effective Date: This interim final rule will be effective 
January 1, 2011.
    Comment Date: To ensure that your comments are considered, we must 
receive them no later than February 28, 2011.

ADDRESSES: You may submit comments by any one of three methods--
Internet, fax, or mail. Do not submit the same comments multiple times 
or by more than one method. Regardless of which method you choose, 
please state that your comments refer to Docket No. SSA-2010-0033 so 
that we may associate your comments with the correct regulation.
    Caution: You should be careful to include in your comments only 
information that you wish to make publicly available. We strongly urge 
you not to include in your comments any personal information, such as 
Social Security numbers or medical information.
    1. Internet: We strongly recommend that you submit your comments 
via the Internet. Please visit the Federal eRulemaking portal at http://www.regulations.gov. Use the Search function to find docket number 
SSA-2010-0033. The system will issue a tracking number to confirm your 
submission. You will not be able to view your comment immediately 
because we must post each comment manually. It may take up to a week 
for your comment to be viewable.
    2. Fax: Fax comments to (410) 966-2830.
    3. Mail: Mail your comments to the Office of Regulations, Social 
Security Administration, 107 Altmeyer Building, 6401 Security 
Boulevard, Baltimore, Maryland 21235-6401.
    Comments are available for public viewing on the Federal 
eRulemaking portal at http://www.regulations.gov or in person, during 
regular business hours, by arranging with the contact person identified 
below.

FOR FURTHER INFORMATION CONTACT: Craig Streett, Office of Income 
Security Programs, Social Security Administration, 2-R-24 Operations 
Building, 6401 Security Boulevard, Baltimore, MD 21235-6401, (410) 965-
9793. For information on eligibility or filing for benefits, call our 
national toll-free number, 1-800-772-1213 or TTY 1-800-325-0778, or 
visit our Internet site, Social Security Online, at http://www.socialsecurity.gov.

SUPPLEMENTARY INFORMATION:

Electronic Version

    The electronic file of this document is available on the date of 
publication in the Federal Register at http://www.gpoaccess.gov/fr/index.html.

Background

    Medicare prescription drug coverage is a voluntary program that 
covers various prescription drugs. The regulations and requirements for 
the program are codified in 42 CFR Part 423. The Centers for Medicare & 
Medicaid Services (CMS) promulgates rules and regulations concerning 
the Medicare program. Anyone who meets the requirements in 42 CFR 
423.30(a) can enroll in Medicare prescription drug coverage. Medicare 
prescription drug coverage beneficiaries are responsible for 
deductibles, cost-sharing, and monthly premiums towards the cost of 
covered prescriptions. Costs vary by plan.
    Beneficiaries with Medicare prescription drug coverage who have 
limited income and resources may qualify for Extra Help with their 
monthly premiums, deductibles, and cost-sharing for Medicare 
prescription drug coverage. To qualify for Extra Help a Medicare 
beneficiary must reside in one of the 50 states or the District of 
Columbia and must have resources and income within specific limits.
    Congress passed MIPPA in July of 2008.\1\ Section 116 of MIPPA 
exempts certain items from income and resources determinations of Extra 
Help eligibility for applications filed on or after January 1, 2010. We 
also apply these exemptions to redeterminations that become effective 
on or after January 1, 2010. The items exempted under section 116 are 
the cash surrender value of life insurance and in-kind support and 
maintenance. To implement these requirements of MIPPA, we issued 
guidance in August 2009 and discontinued counting these exempted items 
for applications and redeterminations in accordance with the 
requirements of the statute. Accordingly, we no longer count as income 
the help a beneficiary receives when someone else provides food and 
shelter, or pays for food, mortgage, rent, heating fuel or gas, 
electricity, water, or property taxes. To reflect these statutory 
exemptions, we have revised sections 418.3335(b) and 418.3350 and 
deleted section 418.3345 of our regulations.
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    \1\ Public Law 110-275.
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    In March 2010, Congress passed the Affordable Care Act, which 
extends the effective date of a determination or redetermination of an 
Extra Help subsidy due to the death of a spouse.\2\ Currently, any 
adjustment in the amount of Extra Help the beneficiary receives is 
effective the month after the month in which we are notified of the 
death of a spouse. In some cases, the death of a spouse could result in 
a decrease in the amount or loss of Extra Help eligibility for the 
beneficiary.
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    \2\ Public Law 111-148 Sec.  3304.
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    Effective January 1, 2011, if the death of the spouse would 
decrease or eliminate the subsidy provided by the Extra Help program, 
we will extend the effective period for a determination or 
redetermination until 1 year after the date on which it would otherwise 
cease to be effective--that is, the month after the month we are 
notified of the death of the spouse. In order to reflect the changes 
made by the Affordable Care Act, we have revised sections 418.3120 and 
418.3123 of our regulations.
    Our current Extra Help rules at 418.3350(b) state that we do not 
count as income the unearned income described in sections 416.1124(b), 
(c)(1) through (c)(12), and (c)(14) through (c)(21). Our current rule 
omits a reference to paragraph 416.1124(c)(22), which we added after we 
published section 418.3350 in December 2005. We are updating the 
reference in section 418.3350 to correct this omission. This is a 
technical change only and does not affect the substance of our rules.

Clarity of These Rules

    Executive Order 12866 requires each agency to write all rules in 
plain language. In addition to your substantive comments on this 
interim final rule, we invite your comments on how to make rules easier 
to understand.
    For example:

[[Page 81845]]

     Would more, but shorter, sections be better?
     Are the requirements in the rule clearly stated?
     Have we organized the material to suit your needs?
     Could we improve clarity by adding tables, lists, or 
diagrams?
     What else could we do to make the rule easier to 
understand?
     Does the rule contain technical language or jargon that is 
not clear?
     Would a different format make the rule easier to 
understand, e.g. grouping and order of sections, use of headings, 
paragraphing?

When will we start to use these rules?

    We will start to use this rule on the effective date shown under 
DATES earlier in this preamble.
    We are also inviting public comment on the changes made by this 
rule. We will consider any relevant comments we receive. We will 
publish a final rule to respond to those comments and to make any 
appropriate changes.

Regulatory Procedures

    We follow the Administrative Procedure Act (APA) rulemaking 
procedures specified in 5 U.S.C. 553 when we develop regulations. 
Generally, the APA requires that an agency provide prior notice and 
opportunity for public comment before issuing a final rule. The APA 
provides exceptions to its notice and public comment procedures when an 
agency finds good cause for dispensing with such procedures because 
they are impracticable, unnecessary, or contrary to the public 
interest, and the agency incorporates a statement of the finding and 
its reasons in the rule issued.\3\
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    \3\ 5 U.S.C. 553(b)(B).
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    We find good cause exists for proceeding without prior public 
notice and comment with respect to the new rules that exempt in-kind 
support and maintenance and the cash surrender value of life insurance 
policies from being counted as income or resources for determining 
Extra Help eligibility because the policies implemented with these 
rules are nondiscretionary under MIPPA. We implemented the policies on 
their effective date of January 1, 2010. Accordingly, we find that 
prior public comment with respect to these changes is unnecessary.
    Beginning January 1, 2011, section 3304 of the Affordable Care Act 
requires us to implement the provision that extends the effective date 
of a decrease or elimination of an Extra Help subsidy due to the death 
of a spouse. In light of the March 23, 2010, enactment date of the 
Affordable Care Act and our need to have authority in place to 
implement section 3304 beginning January 1, 2011, we do not have 
sufficient time to provide a notice and comment period before 
promulgating final rules in order to begin administering the provision 
in a timely manner. Therefore, we find that the use of the APA's notice 
and comment rulemaking procedures would be impracticable in this 
situation. However, we are inviting public comment on the rule and will 
consider any relevant comments we receive within 60 days of the 
publication of the rule.
    In addition, for the reasons cited above, we also find good cause 
for dispensing with the 30-day delay in the effective date of this 
rule.\4\ For the reasons stated above, we find it is impracticable and 
unnecessary to delay the effective date of the changes we are making in 
this interim final rule. Accordingly, we are making this interim final 
rule effective January 1, 2011.
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    \4\ See 5 U.S.C. 553(d)(3).
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Executive Order 12866

    We have consulted with the Office of Management and Budget (OMB) 
and determined that this interim final rule meets the criteria for a 
significant regulatory action under Executive Order 12866. It was 
subject to OMB formal review.

Regulatory Flexibility Act

    We certify that this interim final rule will not have a significant 
economic impact on a substantial number of small entities because it 
affects individuals only. Therefore, a regulatory flexibility analysis 
is not required under the Regulatory Flexibility Act, as amended.

Paperwork Reduction Act

    These rules do not create any new or affect any existing 
collections and, therefore, do not require Office of Management and 
Budget approval under the Paperwork Reduction Act.

(Catalog of Federal Domestic Assistance Program Nos. 93.770, 
Medicare Prescription Drug Coverage; 96.002 Social Security--
Retirement Insurance.)

List of Subjects in 20 CFR Part 418

    Administrative practice and procedure, Aged, Blind, Disability 
benefits, Public assistance programs, Reporting and recordkeeping 
requirements, Supplemental Security Income (SSI), Medicare subsidies.

    Dated: December 23, 2010.
Michael J. Astrue,
Commissioner of Social Security.

0
For the reasons set forth in the preamble, we amend 20 CFR chapter III, 
part 418, subpart D as set forth below:

PART 418--MEDICARE SUBSIDIES

Subpart D--Medicare Part D Subsidies

0
1. The authority citation for subpart D of part 418 continues to read 
as follows:


    Authority: Secs. 702(a)(5) and 1860D-1, 1860D-14 and -15 of the 
Social Security Act (42 U.S.C. 902(a)(5), 1395w-101, 1395w-114, and 
-115).

0
2. Amend Sec.  418.3120 to revise paragraph (a)(3) and add paragraph 
(b)(4) to read as follows:


Sec.  418.3120  What happens if your circumstances change after we 
determine you are eligible for a subsidy?

    (a) * * *
    (3) Subject to the provisions of paragraph (b)(4) of this section, 
your spouse, who lives with you, dies.
* * * * *
    (b) * * *
    (4) If your spouse who lives with you dies, your spouse's death may 
result in changes in your income or resources that could decrease or 
eliminate your subsidy. If we are informed of the death of your spouse 
and the death would cause a decrease in or elimination of your subsidy, 
we will notify you that we will not immediately change your subsidy 
because of your spouse's death. We will defer your redetermination for 
1 year from the month following the month we are notified of the death 
of your spouse, unless we receive a report of another event specified 
in 418.3120(a) that would affect your eligibility for a subsidy.

0
3. Amend Sec.  418.3123 to add paragraph (e) to read as follows:


Sec.  418.3123  When is a change in your subsidy effective?

* * * * *
    (e) Special rule for widows and widowers.--If your spouse who lives 
with you dies and the changes in your income or resources resulting 
from your spouse's death would decrease or eliminate your subsidy, we 
will defer your next redetermination for 1 year from the month 
following the month we are notified of the death of your spouse, unless 
we receive a report of another event specified in 418.3120(a) that 
would affect your eligibility for a subsidy.

0
4. Amend Sec.  412.3335 to revise paragraph (b) to read as follows:

[[Page 81846]]

Sec.  418.3335  What types of unearned income do we count?

* * * * *
    (b) For claims filed before January 1, 2010, and redeterminations 
that are effective before January 1, 2010, we also count in-kind 
support and maintenance as unearned income. In-kind support and 
maintenance is any food and shelter given to you or that you receive 
because someone else pays for it.


Sec.  418.3345  [Removed]

0
5. Remove Sec.  418.3345.

0
6. Revise Sec.  418.3350 to read as follows:


Sec.  418.3350  What types of unearned income do we not count?

    (a) For claims filed on or after January 1, 2010 and 
redeterminations that are effective on or after January 1, 2010, we do 
not count as income in-kind support and maintenance.
    (b) While we must know the source and amount of all of your 
unearned income, we do not count all of it to determine your 
eligibility for the subsidy. We apply to your unearned income the 
exclusions in Sec.  418.3350(c) in the order listed. However, we do not 
reduce your unearned income below zero, and we do not apply any unused 
unearned income exclusion to earned income except for the $20 per month 
exclusion described in Sec.  416.1124(c)(12) of this chapter. For 
purposes of determining eligibility for a subsidy and whether you 
should receive a full or partial subsidy, we treat the $20 per month 
exclusion as a $240 per year exclusion.
    (c) We do not count as income the unearned income described in 
Sec.  416.1124(b) and (c) of this chapter, except for paragraph 
(c)(13).
    (d) We do not count as income any dividends or interest earned on 
resources you or your spouse owns.

0
7. Amend Sec.  418.3405 to revise paragraph (a) to read as follows:


Sec.  418.3405  What types of resources do we count?

    (a) We count liquid resources. Liquid resources are cash, financial 
accounts, and other financial instruments that can be converted to cash 
within 20 workdays, excluding certain non-workdays as explained in 
Sec.  416.120(d) of this chapter. Examples of resources that are 
ordinarily liquid include: stocks, bonds, mutual fund shares, 
promissory notes, mortgages, life insurance policies (for claims filed 
before January 1, 2010, and redeterminations that are effective before 
January 1, 2010), financial institution accounts (including savings, 
checking, and time deposits, also known as certificates of deposit), 
retirement accounts (such as individual retirement accounts or 401(k) 
accounts), revocable trusts, funds in an irrevocable trust if the trust 
beneficiary can direct the use of the funds, and similar items. We will 
presume that these types of resources can be converted to cash within 
20 workdays and are countable as resources for subsidy determinations. 
However, if you establish that a particular resource cannot be 
converted to cash within 20 workdays, we will not count it as a 
resource.
* * * * *
0
8. Amend Sec.  418.3425 to revise paragraph (f) to read as follows:


Sec.  418.3425  What resources do we exclude from counting?

* * * * *
    (f) For claims filed on or after January 1, 2010, and 
redeterminations that are effective on or after January 1, 2010, life 
insurance owned by an individual (and spouse, if any).
* * * * *
[FR Doc. 2010-32848 Filed 12-28-10; 8:45 am]
BILLING CODE 4191-02-P