CMS Pub. 100-16, ch. 9, § 10.1

CMS has the statutory authority to waive or modify requirements that hinder the design of, the

offering of, or the enrollment in, employer/union-sponsored Medicare Advantage (MA) plans.

This statutory authority, set forth in section 1857(i) of the Social Security Act (the Act),

provides:

[Medicare Advantage] Program Compatibility with Employer or Union Group Health Plans –

(1) CONTRACTS WITH MA ORGANIZATIONS - To facilitate the offering of MA plans under

contracts between Medicare Advantage organizations (MAOs) and employers, labor

organizations, or the trustees of a fund established by one or more employers or labor

organizations (or combination thereof) to furnish benefits to the entity’s employees, former

employees (or combination thereof) or members or former members (or combination thereof) of

the labor organizations, the Secretary may waive or modify requirements that hinder the design

of, the offering of, or the enrollment in such MA plans.

(2) EMPLOYER SPONSORED MA PLANS - To facilitate the offering of MA plans by

employers, labor organizations, or the trustees of a fund established by one or more employers or

labor organizations (or combination thereof) to furnish benefits to the entity's employees, former

employees (or combination thereof) or members or former members (or combination thereof) of

the labor organizations, the Secretary may waive or modify requirements that hinder the design

of, the offering of, or the enrollment in such MA plans. Notwithstanding §1851(g), an MA plan

described in the previous sentence may restrict the enrollment of individuals under this part to

individuals who are beneficiaries and participants in such plan.

Under this specific statutory authority, in order to facilitate the offering of MA plans to

employer/union group health plan sponsors, CMS may grant waivers and/or modifications to

MAOs. When exercising its discretion to grant these waivers or modifications, each waiver or

modification will be conditioned upon the MAO meeting a set of defined circumstances and

complying with a set of conditions. MAOs offering employer group plans must comply with all

MA and/or Part D requirements unless those requirements have been specifically waived or

modified.

Waivers/modifications may be granted to MAOs offering “individual” MA plans or MAOs

offering customized employer group MA plans offered exclusively to employer/union group

health plan sponsors. Individual MA plans are open to both individual Medicare beneficiaries

and employer/union-sponsored group health plans’ MA eligible beneficiaries. Customized

employer group MA plans offered exclusively to employer/union group health plan sponsors

include: (1) plans offered by MAOs to employers/unions (these plans are hereinafter referred to

as “employer-only” plans because their plan benefit packages are enumerated in the CMS Health

Plan Management System (HPMS) with identifiers in the 800s to distinguish them from

individual plans offered by MAOs); and (2) plans offered by employers/unions that directly

contract with CMS (hereinafter referred to as “Direct Contract” plans). These “800 series” and

Direct Contract MAOs are referred to collectively as employer/union-only group waiver plans

(“EGWPs”).

Note that CMS’ employer group waiver authority only applies to the Part D portion of the

coverage provided by Cost contracts, not Parts A and B.1 Thus Cost contracts may only use the

Part D waiver authority to offer Part D EGWPs as an optional supplemental benefit. Although

the MA employer group waiver authority does not apply, a Cost contract may negotiate with

employer/union group health plan sponsors to offer extra benefits in addition to Medicare Part A

and Part B benefits (including allowing the employer/union group to buy-down cost sharing for

Medicare Part A and B benefits). These benefits are not supplemental benefits and are not

subject to CMS review or approval.