CMS Pub. 100-16, ch. 9, § 20.4.2

Sponsors

(Rev. 111, 05-03-13, Effective: 05-03-13, Implementation: 05-03-13)

Under its waiver authority, CMS allows the employer/union sponsoring the MA plan flexibility

in determining how much of the enrollee’s Part C beneficiary premium the plan can subsidize,

subject to the conditions set forth below. Further information on requirements allowing

Employer/Union Group Health Plan’s to subsidize the enrollee’s Part D monthly beneficiary

premium can be found in the Prescription Drug Benefit Manual, Chapter 12 (Employer/Union-Sponsored Group Health Plans).

An employer/union sponsor can subsidize different amounts for different classes of enrollees in a

plan, provided: 1) such classes are reasonable and based on objective business criteria, such as

years of service, date of retirement, business location, job category, and nature of compensation

(e.g., salaried vs. hourly); 2) the premium cannot vary for individuals within a given class of

enrollees; and 3) the employer/union must pass through any direct subsidy payments received

from CMS to reduce the amount that the beneficiary pays (or in those instances where the

subscriber to or participant in the employer/union-only plan pays premiums on behalf of a

Medicare-eligible spouse or dependent, the amount the subscriber or participant pays).

As a condition of CMS providing these particular waivers, MAOs that offer “800 series” MA

plans to employers/unions must obtain in writing from such employers/unions their agreement

that they will satisfy the requirements of this waiver with respect to the premiums charged to

their participants. Also, MAOs must retain these agreements with employers/unions and provide

access to these written agreements to CMS (or its designees) in accordance with 42 CFR

§422.503(d) and §422.504(d) and (e).