The Flexibility of the Employer Group Waiver Plan
There are several ways Benistar can help employers provide prescription drug benefits to their Medicare-eligible retirees. One way we do this is by providing flexibility in the plans that we offer, doing our best to reduce member disruption and noise for the employer. By attempting to match plan designs as closely as possible, we are able to provide the smoothest transition to both employer and retiree.
Subsidies and Discounts
The EGWP is particularly competitive in the marketplace because it offers government subsidies and discounts that are built into the premium. Two notable components are the Coverage Gap Discount Program and Catastrophic Reinsurance. CMS requires companies that wish to sell Part D drugs to give a 50% discount to Part D members inside the coverage gap. Catastrophic reinsurance is an 80% subsidy provided by CMS once the member hits a specific out-of-pocket expenditure.
The Coverage Gap
One of the most problematic issues with Part D is the coverage gap (often called “the donut hole”). The coverage gap is when a retiree has reached their initial coverage limit and has to start paying an increased out of pocket for his or her prescription drug costs. This is when the 50% discount from manufacturers kicks in. While the discount may help offset a significant portion of the expenditures from that point on, drug costs involving members who make it to this point are often-times becoming a serious financial issue for the member. With drugs costs always rising, these additional expenditures can be substantial.
A plan that exposes members to this additional out of pocket cost is known as a base plan. Benistar offers solutions that can help to keep the out-of-pocket costs low for retirees during this period by offering full-coverage and generic-only options. Full-coverage plans allow members to continue paying their initial coverage copays throughout the donut hole. Generic-only plans provide a similar benefit to generic drugs while in the donut hole. Both types of plans work to both keep member cost low and keep patients healthy.
The standard open formulary for Benistar’s Part D program is among the broadest Medicare formularies. Benistar’s ability to offer such generous plans stems from our excellent partnerships with carriers and a large book of business.
The EGWP allows plan sponsors the freedom to choose how much they contribute to the cost of the premium. Plan sponsors can either pay for the full premium, for a portion of the premium or they may choose to have retirees enter the plan on a voluntary non-contributory basis. Unlike with the Retiree Drug Subsidy, the EGWP contribution level does not impact savings from subsidies and discounts. This means that regardless of how the premium is split between employer and member, premiums are still eligible for the cost savings and subsidies under the EGWP.