If MMBB does not receive your Comprehensive Plan premium payment by the end of the third month following the month for which the premium was due, we terminate the member’s coverage for death and disability benefits. For example, if the premium payment for January is not paid by the end of March, we terminate the member’s coverage on April 1 and inactivate his or her membership. An inactive member has neither death benefits nor disability coverage.
Reinstating Comprehensive Plan Coverage
An inactive member who wishes to restore coverage and have premiums paid again must be reinstated. To reinstate that member, simply notify MMBB. If the inactivation has been longer than six months, the member must re-enroll.
Reinstatement restarts the phase-in period for the death benefit. The member qualifies for just one-third of the death benefit the first year and two-thirds in the second, a significant decrease.
Reinstatement can be avoided by reactivating the member’s coverage and making all delinquent payments within six months of the inactivation date. MMBB will reverse the inactivation, provided that the total amount due from the time of inactivation through the current month’s premium is paid. Death and disability coverage will resume at previous levels.
MMBB will notify you and the member in writing when payments are late. After three months of nonpayment, the member’s account will be inactivated.
403(b) regulations require that funds withheld from an employee’s pay must be deposited to the member’s account in a timely manner. MMBB defines this as no later than the 15th day of the month subsequent to the month covered by the invoice. For example if the contribution is for January, we must receive it by February 15th. Employers who do not send employee contributions to MMBB in a timely manner are failing to fulfill their fiduciary responsibility as defined by the Internal Revenue Service (IRS). Continued late payments constitute noncompliance with these regulations and could result in fines and penalties.