Best Practices in Employer Group Waiver Plans

Jan 30, 2014
An administration who understands the details of Employer Group Waiver Plans (EGWPs) can result in quality, affordable pharmacy coverage for retirees.
Tags
  • Medicare
  • Seniors

Since the passage of the Affordable Care Act in 2010, more plan sponsors are looking to Employer Group Waiver Plans to provide quality, affordable pharmacy coverage for retirees. More than 4 million Medicare-eligible Americans are now enrolled in EGWPs, representing a greater than 400% increase since 2010. Meanwhile, plans filing for the Retiree Drug Subsidy (RDS) fell from 66% of the surveyed population in 2010 to a projected 40% in 2013.

While the financial advantages of an EGWP can make them more attractive, employers need the right benefit administration to derive the full value of an EGWP. A leading EGWP administrator has the expertise and operational capabilities that can ensure compliance with regulations and a seamless transition for retirees.

Administering an EGWP

Choosing an EGWP means the plan sponsor will provide a group-sponsored Medicare Part D plan to its retirees. As such, the EGWP must adhere to the regulations governing Medicare Part D plans, including formulary requirements, “Any Willing Provider” provisions that ensure access to an extensive pharmacy network, and compliance and reporting requirements not required with RDS plans.

EGWP plan sponsors do have the flexibility to enhance or modify the standard benefit – within CMS guidelines – to meet their specific needs. For example, meeting the terms of a union contract, reducing costs or instituting a stepped-down approach to an individual Part D plan. EGWPs also are able to capitalize on the combination of new reimbursements and subsidies to reduce the cost to provide retiree medical coverage on financial statements.

Not All EGWP Administrators Are Alike

On the surface, since all EGWPs must meet the same CMS requirements, it may be more difficult to see the advantage of using one provider over another. However, the devil is in the details: Paying close attention to the criteria below can ensure plan sponsors receive the financial benefits of an EGWP and an optimal experience for retirees.

1. Medicare experience. Does your team include a lead EGWP expert, member experience specialists, service center liaisons, enrollment, eligibility and operational support? A seasoned and scalable EGWP administrator will help you choose the best plan, ensure a smooth implementation, provide effective ongoing support and deliver a superior member experience.

2. Operational transparency. Does your team have a disciplined and fully transparent process regarding how they will develop your unique implementation plan? An effective EGWP administrator should have clearly defined processes to help you through planning and transitioning your benefit, conducting financial analyses and onboarding data.

EGWP

3. Compliance. Does your team have a history of good standing with CMS that demonstrates the ability to administer plans in a compliant manner? Your administrator should have the ability and flexibility to make timely and appropriate adjustments, developing new processes that remain compliant while still attempting to optimize savings for your plan and satisfaction for members.

4. Proven member experience. Any significant changes in a pharmacy benefit program have the potential to cause some level of uncertainty with your members. Does your administrator have an established communication strategy that includes mail, phone and Web channels? Clear, concise and timely member communications go a long way toward easing members’ concerns.

5. Value. What do your administrative fees truly cover? Administering an EGWP requires an extensive range of capabilities, and not all administrators actually include all of the necessary services and processes to ensure the smoothest enrollment. It is important that you compare the details of the plan’s capability, what is and what is not covered in your administrative fee, and how much you will pay.

Significant differences in an EGWP administrator’s service model and operational processes can translate into dramatically different experiences for plan sponsors and their members. In carefully assessing these capabilities, you will be able to choose the best partner to help you achieve your cost and member satisfaction goals.

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