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frequency of payment. The Premium is due and payable on or before the first day of each <br />succeeding calendar month to which such payments apply. <br />C. Grace Period <br />This Agreement has a thirty (30) calendar day Premium payment Grace Period, which begins on <br />the date the Premium payment is due. If we do not receive the required Premium payment on or <br />before the date it is due, it may be paid during this Grace Period. Coverage will stay in force <br />during the Grace Period. If Premium payments are not received by the end of the Grace Period, <br />we will terminate this Agreement and proceed with the disenrollment of Covered Persons as <br />described in Section 3 of this Agreement. <br />D. Changes in Premium <br />Premium rates may be changed on your Anniversary Date as described in Section 4.A above <br />regarding renewal. <br />E. Other Rules Regarding the Payment of Premiums <br />1. CMS rules govern the effective date of any disenrollment of a Covered Person under this <br />Agreement, and we are not required to retroactively terminate this Agreement or <br />coverage for any Covered Person. <br />2. If full payment of the Premium is not paid when due, this Agreement may be terminated <br />as described in Section 4 of this Agreement. <br />F. Premium Subsidization <br />You may subsidize Premium amounts charged to Eligible Retirees. You are responsible for <br />compliance with all applicable laws and regulations relating to your subsidy of Premiums, <br />including ERISA and CMS Requirements, as applicable. You acknowledge and agree that <br />Premium subsidization may vary for different classes of Eligible Retirees only if such classes are <br />reasonable and based on objective business criteria. You represent and warrant that you will not <br />vary Premium subsidization based on any Covered Person's eligibility for LIS. Further, you will <br />not vary Premium subsidization for individuals within a given class of Eligible Retirees. In no <br />case will you charge an Eligible Retiree more than the sum of the monthly Premium that we <br />charge you for the Medicare Plan benefits. <br />G. Low Income Subsidy <br />You will comply with the following requirements in connection with LIS: <br />1. You are required to pass through any LIS payments received from CMS to reduce the <br />Premium amount that the Covered Retiree pays. You will first apply any LIS amounts to <br />a Covered Person's share of Premium. You may not benefit from any LIS amount until <br />the Premium for a Covered Person (including amounts for the non -drug benefits in a <br />7 <br />94 <br />