Employer Group Waiver Plans (EGWP) is the fastest growing retirement subsidization program initiated by CMS (Center of Medicare & Medicaid Services). Employers and Union groups with large Medicare eligible populations find this program to be financially superior to the traditional retirement drug subsidization program, RDS.

“The total value of the EGWP subsidies can exceed that of RDS by as much as $400 to $500 (pre tax) per year for each covered Medicare beneficiary. The subsidy is estimated to be 35% or more of the plan sponsor drug spend for Medicare Beneficiaries, far exceeding the estimated 20% average subsidy yielded under RDS. For Employers and Unions, this additional savings can amount to millions of dollars per year.”

- Erin Costell, Global Pharmaceutical Solutions

There are two kinds of EGWP options:

Direct Contract EGWP- Employer & Union Groups enter into a contract with CMS to provide plan benefits and receive payments directly from the government. Under this approach, the pre-tax subsidy is set at the national average monthly bid amount, less than the Part D base beneficiary premium. The direct-contract EGWP plan subsidizes administrative costs, and adjusts costs based on the health risk status, or low income status of the beneficiary. In addition to this, "Catastrophic" reinsurance payments provide reimbursement for 80% of eligible drug costs that exceed a beneficiary's maximum “out of pocket” limit.

"800 Series" EGWP- Employers and Union Groups do not contract directly with CMS in this program, but opt to use a 3rd party Part D Sponsor, who acts as the middle man. This arrangement completely alleviates the employer and union group's administrative & financial burden. This is the least demanding solution of all retirement drug subsidization options.

Fox Insurance Company is an “800 Series” EGWP provider licensed to practice in 40 states (states listed on top). To read more about our program, please click here »