Application of CMS Employer Group Waiver Authority

10.1 – Application of CMS Employer Group Waiver Authority (Rev. 111, 05-03-13, Effective: 05-03-13, Implementation: 05-03-13) 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.