§1307 Payment of Premiums

Summary

Designated payors must pay the premiums the corporation sets for their plan when they are due. The corporation decides the payment timing and may require estimated, advance, or other kinds of payments. Premiums charged on September 2, 1974 were due within 30 days after that date, and premiums for the first plan year starting after September 2, 1974 were due within 30 days after that plan year began. Premiums keep accruing until the plan’s assets are distributed under a termination process or a trustee is appointed under section 1342, whichever happens first. If a multiemployer plan gets financial help under section 1431, the corporation may reduce or waive that year’s premiums, but any amount waived is treated as financial help. If a basic benefit premium is late, the corporation can add a late charge up to 100% of the unpaid premium. That charge does not apply if the payor got a hardship waiver before the due date and pays within 60 days after the due date. The corporation must not grant a waiver if the payor looks unable to pay within 60 days. Interest on unpaid premiums runs from the last required payment date to the payment date at the rate in 26 U.S.C. 6601(a). The corporation may also pay interest on refunded overpayments at the same rate. The corporation can sue in federal court where the plan assets are located, where the plan is administered, or where a defendant lives to recover unpaid premiums, penalties, and interest. The corporation must keep guaranteeing basic benefits even if premiums are unpaid. A designated payor is the contributing sponsor or plan administrator for a single-employer plan, and the plan administrator for a multiemployer plan. If a contributing sponsor is part of a controlled group (as defined under 26 U.S.C. 414(b),(c),(m),(o)), every member of that group is jointly and fully responsible for the sponsor’s premiums.