TN 10 (03-04)

A. Introduction

If a worker receiving a Totalization benefit continues working and earns additional U.S. quarters of coverage (QCs), it could result in the worker becoming insured based on U.S. coverage alone. In such cases, the benefit is generally recomputed and the worker is converted to a non-Totalization benefit since it is generally greater than the Totalization benefit. However, if the worker also receives a pension based on noncovered employment, it could mean the WEP would now apply since the worker would no longer receive a Totalization benefit. It is possible in some situations that the non-Totalization benefit with WEP applied would be less than the Totalization benefit where WEP does not apply.

B. Policy

1. General

The Totalization benefit will continue to be paid if the non-Totalization benefit, computed using the applicable WEP formula, would be less than the Totalization benefit. However, earnings and quarters of coverage in the year insured status is met based on U.S. coverage alone and in subsequent years cannot be used to recompute the Totalization primary insurance amount (PIA).

2. Effect on premium-free hospital insurance

If a Totalization beneficiary would be entitled to premium-free hospital insurance (HI) as a result of the number holder (NH) gaining insured status based only on U.S. coverage, but continues to receive a Totalization benefit because it is greater than the non-Totalization benefit, the beneficiary can be technically entitled to the non-Totalization benefit and, therefore, entitled to premium-free HI. Actual entitlement to a Totalization benefit would continue so that the WEP does not apply.