US · guidance
CMS Pub. 100-18, ch. 12, § 20.16.2
State Licensure
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 (42 CFR 423.401(a)(1) and 42 CFR 423.504 (b)(2)). However, an
employer/union Direct Contract EGWP applying to become a PDP solely for purposes of
providing prescription drug coverage to its retirees will not have to meet the state licensing
requirements set forth in 42 CFR 423.401(a)(1) and 42 CFR 423.504(b)(2) as a condition of
being a Medicare prescription drug plan sponsor. CMS waived the licensure requirement for
employer/union Direct Contract EGWPs that provide coverage to their own retirees.
However, as a condition of this waiver, CMS requires that these entities meet certain financial
solvency standards (see section 20.16.3).
History
(Rev.6, Issued: 11-07-08, Effective/Implementation: 11-07-08)
Provenance
- Source
- cms.gov
- Retrieved
- 2026-09-17
- Edition
- iom-2026-09-17
- Content hash
379c524f75f230b2c07bf97173b873a9cb88be8d400edc3259c344621f4e712f
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