EGWP Options That Include Catastrophic Coverage
Didn’t think there are EGWP options that include catastrophic coverage? Think again.
EGWP options that include catastrophic coverage for medicare part D retirees in full compliance with CMS and federal agencies are on the rise. Employer group waiver plans, or egg-whips, now have the additional benefit of being able to provide catastrophic coverage when the beneficiary reaches the $4,350 TrOOP level.
As part of a Direct Contract EGWP, a company, union group, municipality or any other plan sponsor enters contracts with CMS to provide plan benefits to retirees and receives payments directly from the federal government. In this way the subsidy is pre-tax and is determined by the national average monthly bid amount, which is lower than the Part D base premium for the beneficiary. EGWP’s that are of the direct contract type have a number of advantages:
- greatly reduced administrative costs which are handled through the contracted PDP
- adjusts charges based on the health risk status of beneficiaries
- adjusts outlays for low income beneficiaries
Additionally, Catastrophic reinsurance payments provide reimbursement for 80% of eligible drug costs that exceed a beneficiary’s maximum TrOOP limit. ExpressScript® for example has EGWP options that include catastrophic coverage as part of the overall plan benefit for pharmacy benefit plan enrolees. Under the ExpressScripts EGWP, Greater of 5% or $2.65 for Part D generic or preferred multisource brand and $6.60 for all other Part D drugs with a maximum of initial coverage period member cost share.
Being able to tell your retiree plan subscribers that they now have an EGWP options that include catastrophic coverage should ease their anxiety about switching their relationship from the plan sponsor to the PDP provider, such as ExpressScripts.
To learn more on how EGWP options that include catastrophic coverage can help your OPEB strategy, contact us below to get full information on the benefits an EGWP can have for your organization.