What Group-Requirement Waivers Apply to Employer PDPs?

To encourage employers to become Prescription Drug Plans (PDP), the Centers for Medicare & Medicaid Services (CMS) has approved several employer group waivers of the requirements that apply to other entities seeking to become PDPs.

State licensure requirements. One of the waivers addresses state licensure requirements. The guidance notes that, in general, a Part D sponsor must be organized and licensed under state law as a risk-bearing entity eligible to offer health insurance or health benefits coverage in each state in which it offers coverage. However, an employer (or union) applying to become a PDP solely for purposes of providing prescription drug coverage to its retirees will not have to meet state licensing requirements as a condition of being a Medicare prescription drug sponsor. However, CMS will require such entities to certify that they meet solvency standards and/or have other safeguards that CMS will identify in additional guidance.

Other waivers. CMS also has approved several other employer group waivers for retiree drug coverage under Medicare Part D. These waivers include an extension of the Part D timeline for retiree group plans. In addition, CMS has waived requirements for: