Medicare Managed Care Manual 
Chapter 9  Employer/Union Sponsored Group Health Plans 
 
Table of Contents 
 
(Rev. 111, 05-03-13) 
 
Transmittals for Chapter 9 
 
10 - Introduction 
10.1 - Application of CMS Employer Group Waiver Authority 
10.2 - Employer/Union Group Health Plan Sponsorship of Individual MA Plans 
10.3 - Private Reinsurance Arrangements with Employer/Union Group Health Plan 
Sponsors 
10.4 - EGWP Application Procedures 
10.5 - Employer/Union-Only Group Waiver Plans and COBRA 
10.6 - Submission of Part C EGWP Bids 
10.7 - CMS EGWP Part C Payment 
20 - Benefit Design Requirement Waivers 
20.1 - Actuarial Equivalence of Part C Benefits 
20.2 - Actuarial Swapping of Part C Benefits Not Covered By Original Medicare 
20.3 - Mid-Year Benefit Customization/Enhancements 
20.4 - Part C Premium Requirements 
20.4.1 - Waiver of Uniform Premium Requirement 
20.4.2 - Premium Subsidization by Employer/Union Group Health Plan Sponsors 
20.4.3 - Charging Different Premiums to Different Employer/Union Group Health 
Plan Sponsors 
20.5- Premium Withhold 
30 - Enrollment Requirement Waivers 
30.1 - Enrollment Eligibility 
30.2 - Minimum Enrollment Requirements 
30.3 - Enrollment of End Stage Renal Disease (ESRD) Members 
30.4 - Enrollment of Part B-Only Members 
30.5 - Annual Open Enrollment Periods 
30.6 - Group Enrollment/Disenrollment 
30.7 - Beneficiary Enrollment Notification Requirements 
30.8 - Simultaneous Enrollment in an MA Local or Regional Coordinated Care Plan and 
a Stand-Alone PDP 
40 - Service Area Requirement Waivers 
40.1 - Coverage throughout the State 
 
  40.2 - Offering of 800-series Network Private Fee-For-Service (PFFS) Plans Exclusive to 
Employers 
40.3- Service Area Extension and Network Adequacy for MA Local Coordinated Care 
Plans 
50 - Marketing Requirement Waivers 
50.1- Prior Review and Approval of Marketing Materials and Election Forms 
50.1.1 - Rules for Direct Contract and "800 series" Plans 
50.1.2 - Rules for Employer/Union Group Plan-Sponsored Individual MA Plans 
50.2 - Customizing Medicare Disclosure Materials and Election Forms 
50.3 - Timing for Issuance of Employer/Union-Sponsored Group Plan Medicare 
Disclosure Materials 
50.4 - Disclosure Requirements 
50.5 - Identification (ID) Card Requirements 
50.6 - Agent and Broker Licensure and Training Requirements 
50.7 - Providing Information to CMS about the MA Program 
50.8 - Requirement for MA Organization to Provide Specific Information via an Internet 
Website 
50.9 - Beneficiary Customer Service Call Center Requirements 
60 - Waivers Only Applicable to Direct Contract EGWPs 
60.1 - State Licensure 
60.2 - Financial Solvency 
60.3 - Bonding and Insurance 
60.4 - Management and Operations 
60.5 - Reporting Requirements 
 
APPENDICES 
APPENDIX 1 - Instructions for MA Organizations and PDP Sponsors Requesting Additional 
Waiver/Modification of Requirements 
APPENDIX 2 - Approved EGHP Waivers 
 
  10  Introduction 
(Rev. 111, 05-03-13, Effective: 05-03-13, Implementation: 05-03-13) 
 
A list of waivers or modifications approved for MAOs offering employer/union-sponsored group 
health plans is set forth in this chapter. As noted in 10.1, as a condition of CMS granting the 
particular waiver or modification, MAOs must demonstrate that they meet the criteria established 
by CMS as outlined in the specific waiver.  For each waiver, CMS has noted whether the 
waiver/modification applies to 800 Series MA plans, Direct Contract MA plans, or 
employer/union-sponsored group health plan enrollments in individual MA plans.  Each of these 
waivers/modifications will automatically apply to those MAOs approved to offer EGWPs or 
individual plans that satisfy the applicable criteria; thus, they do not need to be granted on an 
individual basis.  However, some waivers may be restricted to particular kinds of entities and/or 
a particular set of circumstances as noted.   A complete list of currently-approved waivers can be 
found in Appendix II. 
 
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 entitys 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. 
 
10.2  Employer/Union Group Health Plan Sponsorship of Individual MA 
Plans 
(Rev. 111, 05-03-13, Effective: 05-03-13, Implementation: 05-03-13) 
 
As stated in 10.1, in addition to EGWPs, employer/union group health plan sponsors may 
choose to enroll their Medicare beneficiaries in individual MA plans.  These MA plans do not 
qualify for the entire employer/union group health plan waivers outlined below in this chapter 
(and also in Appendix II). Those waivers that apply to employer/union group sponsorship of 
individual MA plans are specifically identified in 20 (e.g., actuarial benefit swapping, group 
enrollment/disenrollment process, special enrollment periods (SEPs), and the annual open 
enrollment period waiver).  
 
10.3  Private Reinsurance Arrangements with Employer/Union Group 
Health Plan Sponsors 
(Rev. 111, 05-03-13, Effective: 05-03-13, Implementation: 05-03-13) 
 
MA organizations must meet State licensure and financial solvency requirements under 42 CFR 
422, Subpart I. With regard to these requirements, all MAOs are permitted to obtain reinsurance 
or make other arrangements for the cost of coverage provided to any enrollee (including 
                                                 
1 For further detail on 1876 and 1833 (HCPP) Cost benefit requirements, please see Medicare 
Managed Care Manual, Chapter 17 (Cost Based Payment).   
 
 
  arrangements with employers/unions) to the extent that the MAO is at risk for providing the 
coverage. (See 42 CFR 423.401(b).) Similarly, Medicare requirements do not prohibit MAOs 
offering 800 series or individual MA plans to employer and union group health plan sponsors 
from entering into these kinds of reinsurance arrangements with self-insured (i.e., self-funded) 
employers/unions.2   Notwithstanding these arrangements, the MAO retains the responsibility for 
meeting all Medicare requirements. 
 
10.4  EGWP Application Procedures 
(Rev. 111, 05-03-13, Effective: 05-03-13, Implementation: 05-03-13) 
 
Entities that seek to offer an MA or MA-PD EGWP must enter into a contract with CMS.  An 
applicant must meet certain requirements before CMS can consider entering into a contract with 
the entity. In addition, an applicant must have an acceptable bid before it may enter into a 
contract to offer an MA or MA-PD plan. Information on the application process can be found at: 
http://www.cms.gov/MedicareAdvantageApps/. 
 
10.5  Employer/Union-Only Group Waiver Plans and COBRA 
(Rev. 111, 05-03-13, Effective: 05-03-13, Implementation: 05-03-13) 
 
The Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) requires employer 
group health plans with at least 20 employees to offer continuation coverage to plan enrollees 
who experience a COBRA qualifying event such as termination of employment, death of the 
participant or a divorce.  COBRA requirements apply to active employee plans and retiree plans.  
Employer/union-sponsored group Medicare plans that meet the definition of group health plan, 
as that term is defined at section 5000(b)(1) of the Internal Revenue Code, may be subject to 
COBRA requirements.  
 
The basic Part A and Part B benefits and any other benefits financed by Medicare through rebate 
dollars are not subject to COBRA continuation of coverage requirements.  Employer/Union 
sponsors, however, may be required by COBRA to offer continuation of coverage for 
supplemental benefits that are financed outside of Medicare to beneficiaries enrolled in their 
plans that experience a COBRA qualifying event.  For example, if an employer offered a vision 
benefit that was integrated into a customized EGWP (Direct Contract or 800 series plan) but 
was solely paid for by employer premiums, the employer/union sponsor may be required to offer 
continuation of coverage only for the vision benefit when a beneficiary enrolled in the plan 
experiences a COBRA qualifying event. 
 
However, nothing in either the Medicare law or the COBRA law prohibits an employer/union 
sponsor from electing to provide continuation coverage for the entire employer sponsored group 
health plan (the Medicare benefits along with the non-Medicare supplemental benefits).  In doing 
so, however, an employer/union sponsor must adhere to Medicare requirements.  These include 
the following requirements: 
 
1)  When an MAO offering an employer/union-sponsored group plan receives 
                                                 
2 Employer group plans may enter into administrative services only (ASO) arrangements with MAOs 
whereby the entity provides certain administrative services to a self-funded employer group plan, 
such as claims adjudication and enrollment services. 
 
  notification that an individual is no longer eligible for the employer/union group 
sponsored plan because a COBRA qualifying event has occurred, it must follow the 
termination procedures documented in the Medicare Managed Care Manual, Chapter 
2, 50.7,  which only allows prospective termination.  Terminations can be effective 
only at the end of a calendar month; and 
 
2)  Although COBRA permits a group health plan to charge up to 102% of the applicable 
premium for continuation of coverage, an employer/union sponsor that offers 
COBRA coverage can charge no more than 100% of the premium for the Medicare 
portion of the benefits offered (Medicare will continue to pay its portion of the cost). 
If an employer/union sponsor can segregate the premium for the non-Medicare 
supplemental benefits offered, it can charge up to 102% of the portion of the premium 
that is attributable to the non-Medicare supplemental benefits. 
 
Since in some instances, employer/union sponsors have up to 44 days after a qualifying event to 
provide notice to an enrollee of a right to elect continuation of coverage, and an enrollee has up 
to 60 days after receiving the notice to elect continuation of coverage, an enrollee may elect to 
continue this coverage after the effective date of termination.  Under COBRA law, an enrollee 
who elects continuation of coverage is entitled to have coverage reinstated retroactively back to 
the date of the termination of coverage. For employer/union sponsors that wish to reinstate 
beneficiaries who elect continuation of coverage back to the effective date of termination, MAOs 
offering such plans should submit such reinstatements using Transaction Code 61. 
 
10.6 - Submission of Part C EGWP Bids 
(Rev. 111, 05-03-13, Effective: 05-03-13, Implementation: 05-03-13) 
 
MAOs have the option of preparing Part C bids by either using the expected composite benefit 
plan (a composite of all of the actual expected benefit designs offered to different 
employer/union groups), or by basing the bid on the Medicare fee-for-service benefit provisions. 
 
For MAOs that have a monthly beneficiary rebate amount described in 42 CFR 422.266: 
 
  The MAO may vary the form of rebate for a particular plan benefit package so that the 
total monthly rebate amount may be allocated differently for each employer/union group 
to whom the MAO offers the plan benefit package. 
 
  However, MA bids submitted by MAOs cannot reflect an allocation of A/B rebates to 
o
buy down Part D basic premium or Part D supplemental premium.  Even though this 
kind of specific allocation is prohibited in the bid submission, MAOs still retain the 
flexibility to allocate rebates to buy down Part D basic premium or Part D 
supplemental premium on an individual employer/union basis for each PBP. 
 
  The MAO must:  
 
  Ensure Part B premium reductions are the same for all enrollees in a particular 800 
o
series plan benefit package.  MAOs may not offer particular employer/union groups 
enrolled in the same 800 series plan benefit package (e.g., 801) different Part B 
premium reductions from that established by their MA bids and also cannot offer to 
 
  separately refund Part B premiums outside of the CMS  established bidding and 
rebate allocation process; 
 
  Ensure that the total monthly rebate amount per enrollee is uniform across all 
o
employer/union groups in a particular 800 series plan benefit package.  All 
employer/union groups in a particular 800 series plan benefit package must receive 
supplemental benefits equal to the amount of the A/B rebate allocation. 
However, supplemental benefits provided to each employer/union group may be 
customized; 
 
  Ensure that all rebates are accounted for and used only for the purposes provided in 
o
the Act; and  
 
  Retain documentation that supports the use of all of the rebates on a detailed basis for 
o
each employer/union group in a particular 800 series plan benefit package and 
provide access to this documentation for inspection or audit by CMS (or its designee) 
in accordance with the requirements of 42 CFR 422.503(d) and 422.504(d) and (e). 
 
10.7 - CMS EGWP Part C Payment 
(Rev. 111, 05-03-13, Effective: 05-03-13, Implementation: 05-03-13) 
 
MAOs offering EGWPs will be paid in the same manner as they are paid for their non-group MA 
plans. Note that Part C Regional PPO EGWP bids are included in the calculation of the MA 
regional benchmark calculations. 
 
20 - Benefit Design Requirement Waivers 
(Rev. 111, 05-03-13, Effective: 05-03-13, Implementation: 05-03-13) 
 
MAOs are permitted to modify the cost sharing, benefit level and/or premium offered only to 
employers/unions from the levels of cost sharing, benefits and premiums offered to individual 
enrollees as long as the minimum required Medicare coverage levels (i.e., benefits and coverage 
equivalent to Fee-For-Service (FFS) Medicare) 3 are met and as long as the modification does not 
violate applicable CMS cost sharing limits for discriminatory cost sharing and mandatory 
maximum out-of-pocket (MOOP) limit requirements.  These requirements can be found in the 
Medicare Managed Care Manual, Chapter 4 (Benefits and Beneficiary Protections), 50.1. 
 
Also, to the extent that there are specific MA requirements concerning cost sharing or benefit 
coverage requirements, these requirements apply equally to EGWPs unless explicitly waived or 
modified. 
 
20.1 - Actuarial Equivalence of Part C Benefits 
(Rev. 111, 05-03-13, Effective: 05-03-13, Implementation: 05-03-13) 
 
MAOs offering plans for individual enrollment (i.e., not employer-only plans) have the 
flexibility when negotiating with employers/unions to raise cost sharing (coinsurance, 
                                                 
3 Sections 1852(a)(1)(A) and 1852(b) of the Act; 42 CFR 422.101 
 
  copayments and/or deductibles) for plan benefits by providing a higher benefit level and/or a 
modified premium compared to what is offered for non-employer/union group members. 
 
Example:  An MAO might offer a plan to individual beneficiaries with a $10 copayment for 
all physician office visits (primary care and specialist).  The MAO might want to offer 
employers/unions an MA plan that includes a $5 copayment for primary care physician visits 
and a $20 copayment for specialist physician visits.  
 
An MAO may take advantage of this flexibility by informing CMS of its intentions when it 
submits its bid proposals and providing supporting documentation for the MA plans it 
intends to offer to employer/union sponsors.  In its supporting documentation to CMS, the 
MAO must identify the following:  
 
  The cost sharing amounts the MAO intends to change and the MA plan containing the 
cost sharing; 
  Any modification to the premium charged; and  
  Any improvement in the benefit related to the changed cost sharing. 
 
An MAO is permitted to modify the cost sharing, benefit level and/or premium offered only to 
employers/unions from the levels of cost sharing, benefits and premiums offered to individual 
enrollees as long as the minimum required Medicare coverage levels are met and the 
modification does not have the effect of denying or discouraging access to covered medically-
necessary health care items and services.  Unlike the actuarial swapping flexibility outlined 
below in 20.2, this customization can apply to Medicare-covered benefits and non-Medicare-
covered benefits. Please note this waiver/modification applies only to employer/union group 
sponsorship of individual MA plans. 
 
20.2 - Actuarial Swapping of Part C Benefits Not Covered By Original 
Medicare 
(Rev. 111, 05-03-13, Effective: 05-03-13, Implementation: 05-03-13) 
 
MAOs may swap different types of Part C supplemental benefits not covered under Original 
Medicare that are of equal actuarial value for employer/union group plan sponsors.  The swaps 
may be used if an employer/union prefers to offer a different benefit package to its members than 
the MAO offers to individual beneficiaries under the MA plan. 
 
Example:  An employer may prefer to offer a vision benefit to its employees rather than the 
dental benefit the MAO offers to individual beneficiaries. The MAO may design a vision 
benefit for the employer that has equal actuarial value to the dental benefit and swap these 
benefits in the plan it offers to the employer. 
 
MAOs do not need to obtain specific, advance approval from CMS in order to take advantage of 
actuarial swapping for particular employer/union group plan sponsors. 
 
20.3 - Mid-Year Benefit Customization/Enhancements 
(Rev. 111, 05-03-13, Effective: 05-03-13, Implementation: 05-03-13) 
 
 
  The EGWP program is designed explicitly to allow flexibility for MAOs to negotiate different 
customized plans with particular employer/union groups throughout the year.  This design also 
takes into account that employers/unions offering group health plans may operate on different 
bidding and negotiation timelines.  Therefore, MAOs are allowed to offer 800 series 
customized plans at any time during the contract year (i.e., MAOs are implicitly allowed to offer 
enhanced benefits throughout the year to individual employers/unions that differ from the 
benefits reflected in their bid).  Also, when utilizing individual MA plans open to general 
enrollment for their members, employer/union sponsors are also free to enhance benefits mid-
year for the part of the package that is a wrap-around or enhancement to the MA plan. See 422 
CFR 106. 
 
20.4 - Part C Premium Requirements 
(Rev. 111, 05-03-13, Effective: 05-03-13, Implementation: 05-03-13) 
 
20.4.1  Waiver of Uniform Premium Requirement 
(Rev. 111, 05-03-13, Effective: 05-03-13, Implementation: 05-03-13) 
 
The uniform premium requirement (see 42 CFR 422.100(d)(2)) has been waived for entities 
offering 800 series plans under certain circumstances.  Under this waiver of the uniform 
premium requirement, entities offering 800 series plans serving multiple counties, regions or 
the nation will be allowed to vary premium and cost sharing between defined market areas 
within the same employer/union-sponsored group plan.  This waiver is contingent on the 
requirement that the market areas (geographic areas) within the employer-sponsored group plan 
with premium variation are based on objective market information demonstrating verifiable 
differences in medical costs between these market areas.  The MAO must have documentation 
validating the medical cost variation in these market areas comprising the plan.  The MAOs will 
be required to retain all of these documents and must provide access to this documentation for 
inspection or audit by CMS (or its designee) in accordance with the requirements at 42 CFR 
422.503(d) and 422.504(d) and (e).  Entities offering 800 series plans that serve multiple 
counties, which do not represent separate market areas in terms of medical costs, may not utilize 
this waiver. However, these entities may consider using the plan segmentation rules at 
422.262(c)(2) to vary premium between an 800 series  plans payment areas (i.e., counties). 
 
20.4.2 - Premium Subsidization by Employer/Union Group Health Plan 
Sponsors 
(Rev. 111, 05-03-13, Effective: 05-03-13, Implementation: 05-03-13) 
 
Under its waiver authority, CMS allows the employer/union sponsoring the MA plan flexibility 
in determining how much of the enrollees Part C beneficiary premium the plan can subsidize, 
subject to the conditions set forth below. Further information on requirements allowing 
Employer/Union Group Health Plans to subsidize the enrollees Part D monthly beneficiary 
premium can be found in the Prescription Drug Benefit Manual, Chapter 12 (Employer/Union-
Sponsored Group Health Plans). 
 
An employer/union sponsor can subsidize different amounts for different classes of enrollees in a 
plan, provided: 1) such classes are reasonable and based on objective business criteria, such as 
years of service, date of retirement, business location, job category, and nature of compensation 
(e.g., salaried vs. hourly); 2) the premium cannot vary for individuals within a given class of 
 
  enrollees; and 3) the employer/union must pass through any direct subsidy payments received 
from CMS to reduce the amount that the beneficiary pays (or in those instances where the 
subscriber to or participant in the employer/union-only plan pays premiums on behalf of a 
Medicare-eligible spouse or dependent, the amount the subscriber or participant pays). 
 
As a condition of CMS providing these particular waivers, MAOs that offer 800 series MA 
plans to employers/unions must obtain in writing from such employers/unions their agreement 
that they will satisfy the requirements of this waiver with respect to the premiums charged to 
their participants.  Also, MAOs must retain these agreements with employers/unions and provide 
access to these written agreements to CMS (or its designees) in accordance with 42 CFR 
422.503(d) and 422.504(d) and (e). 
 
20.4.3 - Charging Different Premiums to Different Employer/Union Group 
Health Plan Sponsors 
(Rev. 111, 05-03-13, Effective: 05-03-13, Implementation: 05-03-13) 
 
In addition to the flexibilities outlined above for employers/unions to subsidize different amounts 
of an enrollees premium contribution, 800 series MAOs have the flexibility to negotiate with 
and vary the premium charged to particular employer/union group health plan sponsors. This 
includes the ability to experience rate 800 series employer/union group health plan sponsors 
in determining these premiums. 
 
20.5 - Premium Withhold 
(Rev. 111, 05-03-13, Effective: 05-03-13, Implementation: 05-03-13) 
 
MAOs are required to allow their enrollees, at their option, to pay their premium through 
deductions from their Social Security checks, Railroad Retirement checks, or Federal annuity. 
However, when employers/unions also contribute to the beneficiarys premium, in whole or in 
part, it is not feasible for both MAOs and CMS to factor in the employer/union sponsors 
contribution and adjust the amount of the premium that should be deducted from the 
beneficiarys Social Security or other check. 
 
Therefore, in consideration of this operational obstacle, as a condition of sponsoring an EGWP, 
CMS has waived the requirement that MAOs offering 800 series and Direct Contract EGWPs 
provide beneficiaries the option to pay their premium through withholding.  Thus, the premium 
withhold option will not be available for enrollees in EGWPs; MAOs offering these plans will 
bill the beneficiary and/or the employer/union directly.  This waiver is not applicable to 
employer-sponsored enrollments in individual MA plans. Employer-sponsored group 
beneficiaries enrolled in these MA plans will have the option to pay premiums through 
withholding. 
 
30 - Enrollment Requirement Waivers 
(Rev. 111, 05-03-13, Effective: 05-03-13, Implementation: 05-03-13) 
 
MAOs are permitted to modify certain enrollment requirements that hinder enrollment into 
employer/union-sponsored Medicare Advantage (MA) plans. Where there are specific MA 
requirements concerning enrollment, these requirements apply equally to EGWPs unless 
explicitly waived or modified.  Further information on enrollment requirements can be found in 
 
  the Medicare Managed Care Manual, Chapter 2 (Medicare Advantage Enrollment and 
Disenrollment). 
 
30.1 - Enrollment Eligibility 
(Rev. 111, 05-03-13, Effective: 05-03-13, Implementation: 05-03-13) 
 
Restricted Enrollment Requirement:  In general, MAOs have to accept all Medicare-eligible 
beneficiaries who reside in their service area as set forth in 42 CFR 422.60(a).  EGWPs are not 
subject to this requirement.  Instead, under the CMS eligibility rules for these kinds of plans, 
EGWPs must restrict enrollment solely to those Medicare eligible individuals who are also 
eligible for the employer/union sponsors employment-based health coverage.  See section 
1857(i) of the Act.  Note that, aside from having Medicare eligibility, the employer/union 
sponsors eligibility rules exclusively govern a beneficiarys enrollment entitlement in these 
plans.  Under the employer/union sponsors eligibility requirements, for example, Medicare 
eligible spouses and dependents of participants in the employer/union sponsors plan may be 
permitted to enroll in these EGWPs based on the employer/union sponsors eligibility rules 
regardless of whether or not the participant is Medicare eligible. 
 
 Employment-Based Group Health Plan Requirement:  Employer/union group health plan 
enrollment in EGWPs and individual MA plans is only available to Medicare beneficiaries who 
are members of an employer/union-sponsored group health plan. 
 
Thus, a beneficiarys enrollment in one of these MA plans must be based on receiving 
employment-based health coverage from an employer/union group health plan sponsor that has 
either entered into a contractual arrangement with an MAO to provide coverage or has contracted 
directly with CMS to provide coverage for its Medicare beneficiaries.4 Membership in a State 
Pharmaceutical Assistance Program (SPAP) would not make an individual eligible for 
enrollment into these types of plans.  Similarly, coverage obtained through a professional or 
other type of group association would not make a beneficiary eligible for these kinds of plans, 
except to the extent that the coverage obtained through the association can properly be 
characterized as employment-based group health plan coverage. 
 
In defining an employer-sponsored group MA plan, employment-based retiree health coverage, 
and a group health plan we have not precluded professional or other types of group associations 
from enrolling Medicare beneficiaries in EGWPs and individual MA plans. However, CMS has 
made clear that a beneficiarys enrollment in one of these MA plans is based on his/her receipt of 
employment-based health coverage from an employer/union group health plan sponsor. To the 
extent that membership in an association is based on employment, that association could meet 
the definition of employment-based retiree coverage. For example, an association may elect to 
provide coverage via an EGWP or individual MA plan to retirees who were formerly employed 
by the association. We also clarify that we believe that employers, such as school districts, could 
form an association for the purpose of purchasing employer coverage on behalf of retirees from 
the school districts and that this would be acceptable because, independently, each school district 
would be eligible to enroll its retirees in an EGWP or individual MA plan.  Therefore, for 
example, two or more school districts could combine to form an association for the purpose of 
purchasing retirement coverage for their retired employees. However, an association of farm 
                                                 
4 See 42 CFR 422.106. 
 
  bureaus would not meet this test if membership in a farm bureau were not exclusively based on 
former employment by these farm bureaus.  (See 422.106(d)(4) through (6)). 
 
Active Employees and Retirees Eligible for Enrollment:  Under section 1857(i) of the Act, 
MAOs may offer employer/union-only group plans to both retirees and current (i.e., active) 
employees of a particular employer/union group plan sponsor who are Medicare eligible.  
However, when enrolling active employees into these employer/union group-sponsored MA 
plans, MAOs must comply with all applicable Medicare program requirements, including the 
Medicare Secondary Payer (MSP) requirements.  MAOs must ensure that employers do not 
enroll retirees/active employees in an MA plan offered by the MAO in a manner contrary to 
MSP rules.  See the Medicare Managed Care Manual, Chapter 4 (Benefits and Beneficiary 
Protections), 130, for more information.  For active employees receiving benefits from a group 
health plan of an employer that employs at least 20 employees, the MSP rules establish that the 
non-Medicare group health plan is the primary payer and Medicare is the secondary payer. If the 
enrollee or enrollee's spouse is an active employee, the enrollee must be enrolled in the 
employer/union-sponsored and/or contributed-to non-Medicare group health plan in order to also 
be enrolled in the employer/union-sponsored MA plan. In other words, active employees cannot 
be enrolled in an employer/union-sponsored MA plan unless they also retain their 
employer/union-sponsored primary coverage. In these situations, Medicare payments to MAOs 
for these active employees are adjusted accordingly to account for the presence of the primary 
group health plan payer.  More detailed information on MSP requirements is available at 42 CFR 
411.100 and 42 CFR 422.108 or in the Medicare Secondary Payer Manual on the CMS 
website at: http://www.cms.hhs.gov/Manuals/IOM/list.asp. 
 
30.2 - Minimum Enrollment Requirements 
(Rev. 111, 05-03-13, Effective: 05-03-13, Implementation: 05-03-13) 
 
In general, MAOs must meet minimum enrollment standards as set forth in 42 CFR 422.514(a), 
but such standards do not apply to EGWPs. 
 
30.3 - Enrollment of End Stage Renal Disease (ESRD) Members 
(Rev. 111, 05-03-13, Effective: 05-03-13, Implementation: 05-03-13) 
 
CMS has granted an additional waiver of 42 CFR 422.50(a) (2) to allow employer/union group 
members who have ESRD to enroll in employer/union-sponsored MA plans, under certain 
circumstances. 
 
The MA organizations may choose to accept enrollees with ESRD who are enrolling in an MA 
plan through an employer or union group under any one of four scenarios described in Medicare 
Managed Care Manual Chapter 2 (Medicare Advantage).  As a condition, the MA organizations 
that choose to apply this waiver must agree to apply it consistently; MAOs must consistently 
allow enrollment of employer/union group ESRD beneficiaries in all plan benefit packages 
offered by the MAO under a particular MA contract.  Each year, MA organizations may choose 
whether or not to apply this waiver at the time of their renewal. For further information, refer to 
Medicare Managed Care Manual, Chapter 2 (Medicare Advantage Enrollment and 
Disenrollment), 20.2.3. 
 
 
 
  30.4 - Enrollment of Part B-Only Members 
(Rev. 111, 05-03-13, Effective: 05-03-13, Implementation: 05-03-13) 
 
Certain State and local employers do not deduct Federal Insurance Contributions Act (FICA) 
taxes and as a result their employees may not be entitlement to premium free Medicare/Part A. 
Employers sometimes would like to offer enrollment in an MA plan for their Part B-only 
beneficiaries. MAOs may develop plans for Part B-only Medicare beneficiaries who are 
members of employer/union groups.  In permitting such plans, CMS is waiving the existing 
regulations that prohibit individuals only eligible for Part B from enrolling in MA plans.  See 42 
CFR 422.50(a) (1).  In order to enroll new Part B-only employer/union group members in an MA 
plan, the MAO must create a separate Part B-only employer/union-only 800 series plan in 
accordance with CMS requirements.  See Medicare Managed Care Manual, Chapter 2 (Medicare 
Advantage Enrollment and Disenrollment) for more on enrollment of Part B-only individuals.  
 
30.5 - Annual Open Enrollment Periods 
(Rev. 111, 05-03-13, Effective: 05-03-13, Implementation: 05-03-13) 
 
CMS has waived the requirement to comply with the Medicare annual coordinated election 
period described in 42 CFR 422.62(a)(2)(iii) for employer/union group health plan-sponsored 
enrollments in EGWPs or individual MA plans.  Thus, employer/union group-sponsored 
enrollments in EGWPs or individual MA plans may have different annual open enrollment 
periods.  However, such plans must accept valid requests for disenrollment at any time. 
 
30.6 - Group Enrollment/Disenrollment 
(Rev. 111, 05-03-13, Effective: 05-03-13, Implementation: 05-03-13) 
 
All MAOs may enroll/disenroll employer/union-sponsored group health plan Medicare 
beneficiaries as a group.  This waiver applies to both EGWPs and individual MA plans offered to 
employer/union group health plan Medicare beneficiaries.  The group enrollment and 
disenrollment procedures are outlined in the Medicare Managed Care Manual, Chapter 2 
(Medicare Advantage Enrollment and Disenrollment). 
 
Additionally, employer/union members enrolled in EGWPs and individual MA plans are eligible 
for special election periods (SEPs). These SEPs apply to employer-sponsored enrollments in an 
individual MA plan or an EGWP.  While the SEP for employer/union group members exists 
year-round, the employer/union sponsors eligibility rules determine when the SEP may be used. 
These SEP procedures are outlined in the Medicare Managed Care Manual, Chapter 2 (Medicare 
Advantage Enrollment and Disenrollment). 
 
30.7 - Beneficiary Enrollment Notification Requirements 
(Rev. 111, 05-03-13, Effective: 05-03-13, Implementation: 05-03-13) 
 
In general, the notice requirements contained in Appendix 1 (Summary of Notice Requirements) 
of the Medicare Managed Care Manual, Chapter 2 (Medicare Advantage Enrollment and 
Disenrollment) apply to all employer/union group health plan-sponsored enrollments in 
individual MA plans or EGWPs, with the following clarification that  employer/union-sponsored  
group health plans can be customize each model beneficiary notice, which is applicable, to the 
extent the modifications will more clearly and accurately reflect the employer group plan.  
 
   
Certain notices contained in the Medicare Managed Care Manual, Chapter 2 (Medicare 
Advantage Enrollment and Disenrollment), Appendix 1, are not applicable to employer/union 
group health plan-sponsored enrollments in individual MA plans or EGWPs, as identified below:  
 
  Exhibit 27:  MA Model Notice to Inform Full-Benefit Dual Eligible Member of Auto-
Enrollment in MA-PD Plan; 
 
  Exhibit 27a: MA-PFFS Model Notice to Inform Full-Benefit Dual Eligible Member of 
Auto-Enrollment in PDP; 
 
  Exhibit 28:  MA Model Notice to Inform Member of Facilitated Enrollment into MA-PD 
plan; q  
 
  Exhibit 28a: MA Model Notice to Inform Member of Facilitated Enrollment into PDP; 
and  
 
  Exhibit 29: Acknowledgement of Request to Opt Out of Auto/Facilitated Enrollment. 
 
30.8 - Simultaneous Enrollment in an MA Local or Regional Coordinated 
Care Plan and a Stand-Alone PDP 
(Rev. 111, 05-03-13, Effective: 05-03-13, Implementation: 05-03-13) 
 
Members of 800-series regional PPO EGWPs and local coordinated care plan EGWP enrollees 
may enroll in 800-series stand-alone PDPs, provided that separate medical and prescription drug 
vendors work closely together with the employer/union sponsor to provide coordinated care and 
disease management services between the MA and the PDP portion of the benefit. Prior to 
extending this waiver to regional coordinated care EGWPs, simultaneous enrollment in MA 
plans and PDPs was limited to local coordinated care plan enrollees. 
 
40 - Service Area Requirement Waivers 
(Rev. 111, 05-03-13, Effective: 05-03-13, Implementation: 05-03-13) 
 
CMS has waived certain service area requirements that hinder the design of, the offering of, or 
the enrollment in, employer/union-sponsored Medicare Advantage (MA) plans. Further 
information is provided in this section describing when these waivers are applicable. 
 
40.1 - Coverage throughout the State 
(Rev. 111, 05-03-13, Effective: 05-03-13, Implementation: 05-03-13) 
 
If an MAO provides coverage to individuals in any part of a State, CMS is waiving the 
requirement that the Individual Employer Group Health Plans and EGWPs have the same service 
area.  Accordingly, under this waiver, an MAO offering an individual MA plan in a state can 
offer an EGWP (of the same plan type) in any area within that State or throughout the entire 
State (provided the EGWP service area is properly requested and defined in HPMS).  For Part C 
benefits, the MAO is responsible for ensuring that CMS provider network adequacy 
 
  requirements are met and that consistent benefits are provided to the employer/union group plan 
sponsors enrollees. 
 
40.2 - Offering of 800-series Network Private Fee-For-Service (PFFS) Plans 
Exclusive to Employers 
(Rev. 111, 05-03-13, Effective: 05-03-13, Implementation: 05-03-13) 
 
In 2006, CMS granted a waiver of the nexus test (that requires that an MAO offering an 800-
series EGWP also offer an individual market MA plan under the same contract) for non-network 
private-fee-for service plans (PFFS) effective CY 2008. The Medicare Improvements for Patients 
and Providers Act of 2008 (MIPPA) prohibits non-network employer PFFS plans beginning in 
CY 2011; therefore, this waiver is no longer available. 
 
Section 162(a)(2) of MIPPA amended section 1852(d) of the Act by adding a new requirement 
for employer/union-sponsored PFFS plans.  For plan year 2011 and subsequent plan years, 
MIPPA requires that all employer/union- sponsored PFFS plans under section 1857(i) of the Act 
meet the access standards described in section 1852(d)(4) of the Act only through entering into 
written contracts or agreements in accordance with section 1852(d)(4)(B) of the Act, and not, in 
whole or in part, through establishing payment rates meeting the requirements under section 
1852(d)(4)(A) of the Act. 42 CFR 422.114(a)(4) describes this requirement.  Further detail on 
requirements related to PFFS plans can be found in Medicare Managed Care Manual Chapter 
16a (Private Fee-for-Service (PFFS) Plans). 
 
40.3 - Service Area Extension and Network Adequacy for MA Local 
Coordinated Care Plans 
(Rev. 111, 05-03-13, Effective: 05-03-13, Implementation: 05-03-13) 
 
To enable employers/unions to offer coordinated care plans to all their Medicare-eligible 
members wherever they reside, CMS has expanded the waiver of service area requirements for 
MAOs offering local coordinated care plans (e.g., local PPOs and HMOs) as described in this 
section. An MAO offering a coordinated care plan in a given service area (i.e., State) can extend 
coverage to an employer/union sponsors beneficiaries residing outside of that service area when 
the MAO, either itself or through partnerships (i.e., arrangements) with other MAOs, is able to 
meet CMS provider network adequacy requirements and provide consistent benefits to those 
beneficiaries. 
 
This waiver is made available in recognition that an MAO offering a local coordinated care 800 
series plan has limited flexibility in designing an expanded service area outside a State in which 
it is unable to secure contracts with an adequate number of network providers to satisfy CMS 
MA coordinated care network adequacy requirements that would otherwise apply. MAOs 
offering 800 series local coordinated care plans that desire to offer expanded service areas 
(e.g., national service areas) must request an expanded 800 series service area in accordance 
with CMS requirements and meet the following conditions: 
 
(1) The MAO must be able to meet CMS MA coordinated care network adequacy 
requirements for at 51% of a particular employer or union groups beneficiaries enrolled 
in the 800 series coordinated care plan.  In those instances where the MAO cannot meet 
 
  this requirement for a particular employer or union groups beneficiaries, CMS will 
require information, including MA network adequacy information for the particular 
employer or union group, to be submitted for review and approval by CMS; 
 
(2) All of an employer or union groups beneficiaries, including those beneficiaries that do 
not have access to contracted MA network providers, must receive the same covered 
benefits at the preferred in-network cost sharing for all covered benefits offered by the 
coordinated care plan;  
 
(3) The MAO must provide payment to non-contract providers in accordance with the 
requirements of The Act (i.e., the MAO must provide payment in an amount so that  
(i) the sum of such payment amount and any cost sharing provided under the plan is equal 
to at least (ii) the total dollar amount of payment for such items and services as would 
otherwise be authorized under parts A and B (including any balance billing under such 
parts [emphasis added])). Note that, unlike private fee-for-service MA plans, MAOs 
offering local coordinated care plans may pay more than the required above-mentioned 
statutory amounts to any particular non-contract provider. Please note that hospitals and 
other institutional providers with Original Medicare fee-for-service provider agreements 
that place certain restrictions on treating any Medicare beneficiaries may be subject to 
having those agreements terminated by CMS. (See also 42 CFR 422.214; and 42 CFR 
489.53(a)(2).)  
 
(4) The MAO must take whatever steps are necessary to ensure that beneficiaries residing in 
areas where the MAO is unable to secure contracts with an adequate number of a specific 
type of provider(s) to satisfy CMS MA network adequacy requirements will have access 
to providers. This may include providing assistance to these beneficiaries in locating 
providers and/or utilizing its ability, as outlined above, to pay non-contract providers 
more than the statutory minimum required in section 1852(a)(2)(A) of the Social Security 
Act;  
 
(5) In addition to assisting enrollees residing in non-network areas of the local coordinated 
care plan (i.e., areas in which the MAO is unable to satisfy CMS network adequacy 
requirements)  in finding providers who will furnish services, the MAO must also 
establish a program to specifically assist these enrollees in the coordination of their health 
care services.  Areas that should be addressed in its coordination plan for its non-network 
enrollees are discussed in Chapter 4 of this manual;   
 
(6) In order to minimize any adverse effects on beneficiaries residing in areas where the 
MAO is unable to satisfy CMS MA network adequacy requirements, the MAO also must 
have in place an effective communication plan with employer groups prior to 
transitioning these employer group beneficiaries to the local coordinated care plan.  This 
must include the following key communications:  
 
 
  (a)  Ensure employer sponsors and their beneficiaries understand how the plan will 
work for those enrollees residing in areas where MA network providers are not 
available, including that non-contract providers are generally not required to accept 
the plan and furnish services; 
 
(b)  Ensure the MAO has a targeted communication strategy and provides information 
and assistance to beneficiaries affected by lack of access to network providers (e.g., 
whom to contact if they have difficulties locating a provider that will furnish 
services, etc); 
 
(c)  Conduct targeted education and outreach to the current providers of beneficiaries 
affected by lack of access to network providers prior to transitioning the group to 
the local coordinated care plan.  This may include explaining how the local 
coordinated care employer group product works, how claims are submitted, etc.; 
and  
 
(d)  Assure all non-contract providers that they will receive prompt and accurate 
payment. 
 
(7) In addition, MAOs offering 800 series local coordinated care plans that desire 
expanded services areas (e.g., a national service area) must request an expanded service 
area in accordance with CMS requirements to ensure their service area is properly 
defined in HPMS and must bid accordingly. 
 
50 - Marketing Requirement Waivers 
(Rev. 111, 05-03-13, Effective: 05-03-13, Implementation: 05-03-13) 
 
MAOs are permitted to modify certain Marketing requirements including those listed in this 
section. Where there are specific MA requirements concerning Marketing, these requirements 
apply equally to EGWPs unless explicitly waived or modified. These requirements can be found 
in the Medicare Managed Care Manual, Chapter 3 (Medicare Marketing Guidelines). 
 
50.1 - Prior Review and Approval of Marketing Materials and Election Forms 
(Rev. 111, 05-03-13, Effective: 05-03-13, Implementation: 05-03-13) 
 
50.1.1 - Rules for Direct Contract and 800 series Plans 
(Rev. 111, 05-03-13, Effective: 05-03-13, Implementation: 05-03-13) 
 
CMS has waived the prior review and approval requirements for marketing materials and 
election forms contained in 42 CFR 422.2262 for all EGWPs. These waivers apply to 800 
series and Direct Contract plans. 
 
As a result of this waiver, Direct Contract plans and MAOs offering 800 series EGWPs or 
employer-sponsored individual MA plans are not subject to the annual restriction on 
communications directed to Medicare eligible beneficiaries prior to October 1st.  Rather, CMS 
strongly encourages employer/union sponsors and entities offering these plans to 
employers/unions to communicate to beneficiaries early in the process and to continue to 
 
  communicate about their benefits frequently prior to their annual open enrollment period (which 
may differ from Medicares annual coordinated election period. Employers/unions and/or entities 
that offer employer-sponsored 800 series or individual plans to employers/unions should direct 
beneficiaries to available resources and explain their coverage and how it coordinates with 
Medicare. 
 
50.1.2  Rules for Employer/Union Group Plan-Sponsored Individual MA 
Plans 
(Rev. 111, 05-03-13, Effective: 05-03-13, Implementation: 05-03-13) 
 
The waiver of prior review and approval requirements for marketing materials and election 
forms contained in 42 CFR 422.2262  similarly applies to an MAO that elects to use the waiver 
outlined in 50.3,  which allows MAOs to customize disclosure materials.  This waiver applies to 
those MAOs that elect to customize disclosure materials for a particular employer/union group 
health plan sponsor that offers coverage to its Medicare beneficiaries using an individual MA 
plan (e.g., individual MA plan paired with non-Medicare supplemental coverage designed to 
wrap around or enhance the individual MA plan).  
 
50.2  Customizing Medicare Disclosure Materials and Election Forms 
(Rev. 111, 05-03-13, Effective: 05-03-13, Implementation: 05-03-13) 
 
In order to meet the requirements of 42 CFR 422.111(a)(2), which require an MA plan to 
disclose information about the plan in a clear, accurate and standardized form, MAOs should 
provide customized disclosure materials to 800 series and Direct Contract MA plan enrollees 
to reflect the modified/supplemental benefits being provided to that particular employer/union 
group health plan enrollees, if any. More specifically, CMS has waived any rules that would 
otherwise prohibit these entities from offering customized disclosure materials to the extent those 
customized materials will more clearly and accurately describe the benefits available to 
employer/union group Medicare beneficiaries (for example, when the supplemental coverage is 
taken into account). This waiver also allows customization of disclosure materials for employer-
sponsored enrollments in individual MA plans (e.g., where an employer/union group health plan 
sponsors coverage to its members using an individual MA plan and a non-Medicare 
supplemental plan designed to wrap around or enhance the individual MA plan. 
 
Premium amounts are required to be accurately reflected on any customized beneficiary 
disclosure material. MAOs should ensure these materials accurately reflect the actual premium 
amount the beneficiary pays when the supplemental coverage, if any, and any corresponding 
employer/union premium subsidization (or subsidization by CMS in the case of low-income 
premium subsidy eligible beneficiaries) is taken into account.  Alternatively, if accurate premium 
information concerning the amount the beneficiary actually pays is not available to the MAO, the 
MAO may substitute language in lieu of providing actual premium amounts.  Such language may 
include, for example, For information concerning the actual premiums you will pay, please 
contact [insert employer/union group health plan sponsor name] or your employer group benefits 
plan administrator. 
 
 
 
  50.3  Timing for Issuance of Employer/Union-Sponsored Group Plan 
Medicare Disclosure Materials 
(Rev. 111, 05-03-13, Effective: 05-03-13, Implementation: 05-03-13) 
 
Employer-sponsored 800 series plans, Direct Contract plans or individual MA plans that are 
subject to Medicare marketing and disclosure requirements are also subject to any applicable 
timing requirements for issuance of these materials.  However, CMS has waived or modified 
applicable timing requirements in certain circumstances.  These include those circumstances 
where a particular employer/union sponsor has an open enrollment period that differs from 
Medicares Annual Coordinated Election Period (AEP). In this situation, the timing for issuance 
of any disclosure materials that are based on the AEP should be based instead on the 
employer/union sponsors open enrollment period.  Further information is provided in the 
Medicare Managed Care Manual, Chapter 3 (Medicare Marketing Guidelines). 
 
50.4 - Disclosure Requirements 
(Rev. 111, 05-03-13, Effective: 05-03-13, Implementation: 05-03-13) 
 
CMS has waived the specific disclosure requirements at 42 CFR 422.111 for employer/union 
group health plan beneficiaries when the employer/union sponsor is subject to alternative 
disclosure requirements (e.g., those required by the Employee Retirement Income Security Act 
of 1974 (ERISA)), and the employer/union sponsor complies with such alternative 
requirements.  However, these alternative disclosure materials (including summary plan 
descriptions and all other beneficiary communications that provide descriptions of the Medicare 
benefit offerings) must be provided by the Direct Contract MAO, or the MAO offering the 800 
series plan or employer-sponsored individual MA plan to beneficiaries on a timely basis. 
 
Similarly, for an employer/union sponsor plan eligible for the alternative disclosure standards 
waiver, an MAO that offers 800 series plans to these employer/union sponsors may provide 
copies of the alternative disclosure materials or, alternatively,  information that would be 
necessary to satisfy its reporting and disclosure obligations under 42 CFR 422.516(d).  42 CFR 
422.516(d) states that entities must furnish, upon request, the information that any employees 
health benefits plan needs to fulfill its reporting and disclosure obligations under ERISA.  
As a condition of CMS providing these particular waivers or modifications, CMS reserves the 
right to request and review these materials in the event of beneficiary complaints, or for any 
other reason it determines to ensure the information accurately and adequately informs Medicare 
beneficiaries about their rights and obligations under the plan. MAOs are also required to retain 
these dissemination materials and provide access to these written materials to CMS (or its 
designees) in accordance with 42 CFR 422.503(d) and 422.504(d) and (e). 
 
50.5 - Identification (ID) Card Requirements 
(Rev. 111, 05-03-13, Effective: 05-03-13, Implementation: 05-03-13) 
 
Direct Contract MAOs and MAOs that offer 800 series plans may provide enrollees with one 
combination member Identification (ID) card which incorporates medical, Part D, and employer- 
sponsored non-Medicare supplemental medical and/or drug benefits.  However, entities must 
comply with all other CMS ID card requirements, including the requirements contained in the 
Medicare Marketing Guidelines.  Note that this same waiver applies when an MAO elects to use 
the waiver outlined in 50.2 to customize disclosure materials for a particular employer/union 
 
  sponsor that offers coverage to its members using an individual Medicare plan paired with a non-
Medicare supplemental plan designed to wrap around or enhance the individual Medicare plan. 
 
Note that it is also permissible to include the name and/or logo of the employer/union sponsor on 
the ID card. This activity is not considered co-branding. 
 
50.6 - Agent and Broker Licensure and Training Requirements 
(Rev. 111, 05-03-13, Effective: 05-03-13, Implementation: 05-03-13) 
 
Unless otherwise noted, all requirements listed in the Medicare Managed Care Manual, Chapter 
3 (Medicare Marketing Guidelines), 120 do apply. All agents and brokers (employed and 
contracted) selling 800 series plans to employer/union group plan sponsors on behalf of an 
MAO must be licensed to sell these products as required by State law. However, representatives 
of an MAO or representatives of employer/union group plan sponsors or others acting on their 
behalf (e.g., their employees, benefit consultants, third party administrators) who conduct 
educational, enrollment or informational events for retirees of employer/union sponsors are not 
required to be licensed for these purposes, as these activities do not constitute marketing or sales 
activities. 
 
Consequently, the broker/agent testing requirements, as described in the Medicare Managed Care 
Manual, Chapter 3 (Medicare Marketing Guidelines), do not apply under these circumstances. 
 
50.7 - Providing Information to CMS about the MA Program 
(Rev. 111, 05-03-13, Effective: 05-03-13, Implementation: 05-03-13) 
 
CMS has waived the requirements contained in 42 CFR 422.64 for all EGWPs.  These regulatory 
provisions require plans to report certain information annually to CMS to enable us to provide 
current and potential beneficiaries the information they need to make informed decisions 
concerning their available choices for Medicare coverage. This includes information to be 
included in the CMS Medicare and You publications and on the CMS website (e.g., Medicare 
Plan Finder). Since these plans are not available for general enrollment, these requirements do 
not apply and are waived. 
 
50.8 - Requirement for MA Organization to Provide Specific Information via 
an Internet Website 
(Rev. 111, 05-03-13, Effective: 05-03-13, Implementation: 05-03-13) 
 
To the extent an MAO has a website or provides information through the Internet, 42 CFR 
422.111(f)(12) requires MAOs to post copies of the plans Evidence of Coverage, Summary of 
Benefits, and information on the network of contracted providers on the website. 
 
CMS has waived both the requirements of 42 CFR 422.111(f)(12) and 42 CFR 422.111h(2) for 
all 800 series plans.  MAOs will not be required to provide any information concerning these 
EGWPs on the MAOs website.  Since these kinds of employer-sponsored MA plans are not 
available for general enrollment, these requirements do not apply and are therefore waived. 
 
 
 
  50.9 - Beneficiary Customer Service Call Center Requirements 
(Rev. 111, 05-03-13, Effective: 05-03-13, Implementation: 05-03-13) 
 
CMS has granted a waiver of the beneficiary customer service call center hour requirements for 
all Direct Contract and 800 series EGWPs offered by MAOs.  These entities will be allowed to 
operate beneficiary customer service call center hours for their employer/union group health plan 
only enrollees that differ from the requirements for plans offered to individual beneficiaries 
listed in 42 CFR 422.111h(1).  These entities must ensure that a sufficient mechanism is 
available to respond to beneficiary inquiries and must provide customer service call center 
services to Medicare beneficiaries during normal business hours.  However, CMS may review 
the adequacy of these call center hours and potentially require expanded beneficiary customer 
service call center hours in the event of beneficiary complaints or for other reasons in order to 
ensure that the entitys customer service call center hours are sufficient to meet the needs of its 
enrollees. 
 
60 - Waivers Only Applicable to Direct Contract EGWPs 
(Rev. 111, 05-03-13, Effective: 05-03-13, Implementation: 05-03-13)  
 
A list of waivers or modifications approved specifically for Direct Contract EGWPs can be 
found in this section.  
 
60.1 - State Licensure 
(Rev. 111, 05-03-13, Effective: 05-03-13, Implementation: 05-03-13) 
 
In general, an MAO must be organized and licensed under State law as a risk-bearing entity 
eligible to offer health insurance or health benefits coverage in each State in which it offers 
coverage.  However, an employer/union applying to become an MAO solely for purposes of 
providing coverage to its members will not have to meet the State licensing requirements set 
forth at 42 CFR 422.400(a) and 42 CFR 422.503(b)(2) as a condition of being an MAO. 
 
60.2 - Financial Solvency 
(Rev. 111, 05-03-13, Effective: 05-03-13, Implementation: 05-03-13) 
 
An MAO generally must be licensed as a risk-bearing entity eligible to offer health insurance or 
health benefits coverage under State law.  (See 42 CFR 422.400(a).)  CMS waived the licensure 
requirement for employer/union direct contract MAOs that provide coverage to their own 
members pursuant to its waiver authority.  However, as a condition of this waiver, CMS requires 
that these entities meet certain financial solvency standards.  CMS requires that the entity 
demonstrate that its fiscal soundness is commensurate with its financial risk, and that through 
other means, the entity can assure that claims for benefits paid for by CMS and beneficiaries will 
be covered. 
 
60.3 - Bonding and Insurance 
(Rev. 111, 05-03-13, Effective: 05-03-13, Implementation: 05-03-13) 
 
An employer/union directly contracting with CMS as an MAO must meet the bonding and 
insurance standards described at 42 CFR 422.503(b)(4)(iv)-(v).  However, CMS may, on a case-
 
  by-case basis, provide flexibility to an employer/union directly contracting with CMS as an 
MAO by waiving these requirements upon a demonstration that different Federal or State legal 
standards (such as the Employee Retirement Income Security Act (ERISA) bonding 
requirements) are satisfied. 
 
60.4 - Management and Operations 
(Rev. 111, 05-03-13, Effective: 05-03-13, Implementation: 05-03-13) 
 
In general, an entity seeking to contract with CMS as an MAO must have administrative and 
management arrangements that demonstrate the following pursuant to 42 CFR 422.503 (b)(4)(i)-
(iii): 
 
  Policy-making bodies exercising oversight and control to ensure that management actions 
are in the best interest of the organization and its enrollees; 
 
  A quality improvement program and external quality review; 
 
  Administration and management; and  
 
  An executive manager whose appointment and removal are under the control of the 
policy-making body. 
 
An employer/union directly contracting with CMS as an MAO may be subject to other 
potentially different standards governing its management and operations, such as fiduciary 
requirements under the ERISA State law standards, and certain oversight standards created 
under the Sarbanes-Oxley Act.  To reflect these issues and avoid imposing additional (and 
potentially conflicting) government oversight that may hinder employers/unions from 
considering MA direct contracts with CMS, the requirements at 42 CFR 422.503(b)(4)(i)(iii), as 
noted above, are waived if the employer/union (or to the extent applicable, the business associate 
with which it contracts for benefit services) is subject to ERISA fiduciary requirements or similar 
State or Federal law standards.  However, such entities (or their business associates) are not 
relieved from the record retention standards applicable to other MAOs set forth at 42 CFR 
422.504(d). 
 
60.5 - Reporting Requirements 
(Rev. 111, 05-03-13, Effective: 05-03-13, Implementation: 05-03-13) 
 
In general, MAOs must report certain information to CMS, to their enrollees, and to the general 
public (such as the cost of their operations and financial statements) under 42 CFR 422.516(a). 
To avoid imposing additional and possibly conflicting public disclosure obligations that would 
hinder the offering of employer/union-sponsored group plans, CMS will modify these reporting 
requirements for Direct Contract EGWPs to allow information be reported to enrollees and to the 
general public to the extent required by other law (including ERISA or securities laws), or by 
contract. 
 
  APPENDIX 1 
 
Instructions for MA Organizations and PDP Sponsors Requesting Additional 
Waiver/Modification of Requirements 
(Rev. 111, 05-03-13, Effective: 05-03-13, Implementation: 05-03-13) 
 
MAOs may submit individual waiver/modification requests to CMS at any time.  The MAO 
should submit these additional waiver/modification requests to their respective Account 
Manager.  
 
These requests must be identified as requests for additional waivers/modifications and must fully 
address the following items:  
 
  Specific provisions of existing statutory, regulatory, and/or CMS policy requirement(s) 
the entity is requesting to be waived/modified (please identify the specific requirement 
(e.g., 42 CFR 422.66, or appropriate section in the Medicare Managed Care Manual 
and whether you are requesting a waiver or a modification of specific  requirements);   
 
  A description of how the particular requirements hinder the design of, the offering of, or 
the enrollment in, the employer-sponsored group plan;    
 
  A detailed description of the waiver/modification requested, including how the 
waiver/modification will remedy the impediment (i.e., hindrance) to the design of, the 
offering of, or the enrollment in, the employer-sponsored group plan;  
 
  Other details specific to the particular waiver/modification that would assist CMS in the 
evaluation of the request; and  
 
  Contact information (contract number, name, position, phone, fax and email address) of 
the person available to answer inquiries about the waiver/modification request. 
 
  Appendix 2: Approved Part C EGHP Waivers 
(Rev. 111, 05-03-13, Effective: 05-03-13, Implementation: 05-03-13) 
 
Chapter 9  Applicability 
Section   
DESCRIPTION OF WAIVERS  Indiv.   EGWP:  EGWP: 
Plan  800  Direct 
Series  Contract 
 
BENEFIT DESIGN  REQUIREMENT WAIVERS 
 
Requirement waived/modified: 42 CFR 422.100(d).  (Uniform premium & cost sharing).  20.1  X  N/A  N/A 
 
Waiver or Modification:  Actuarial Equivalence of Part C Benefits - MAOs may negotiate 
with employers/unions to raise cost sharing (coinsurance, copayments and/or deductibles) for 
plan benefits by providing a higher benefit level and/or a modified premium compared to what 
is offered to non-employer/union group members. Customizations can apply to both Medicare 
covered and non-Medicare-covered benefits. Applies only to employer/union group 
sponsorship of individual MA plans. 
 
Requirement waived/modified:    42 CFR 422.100(d).  (Uniform premium & cost sharing).  20.2  X  N/A  N/A 
 
Waiver or Modification:  Actuarial swapping of Part C Benefits Not Covered Under Original 
Medicare - MAOs may swap different types of Part C supplemental benefits not covered 
under Original Medicare that are of equal actuarial value for employer/union group plan 
sponsors. Applies only to Medicare-covered benefits. 
 
Requirement waived or modified: 42 CFR 422.106 (Mid-year benefit/customization  20.3  X  X  X 
enhancements). 
 
 
  Chapter 9  Applicability 
Section   
DESCRIPTION OF WAIVERS  Indiv.   EGWP:  EGWP: 
Plan  800  Direct 
Series  Contract 
Waiver or modification: MAOs are allowed to offer 800 series customized plans at any 
time during the contract year (i.e., MAOs are allowed to offer enhanced benefits throughout 
the year to individual employers/unions that wrap-around the MA benefit package and are not 
part of the bid).  Also, if an employer has enrolled its retirees in an MA plan open to general 
Medicare enrollment, it can do a mid-year enhancement of any benefits that are wrap-around 
benefits (i.e., as previously noted, benefits that are not part of the MA benefit package).  
 
Requirement waived/modified: 42 CFR 422.111(d)(2) (Uniform premium requirement).  20.4.1  N/A  X  X 
 
Waiver or Modification: Waiver of Uniform Premium Requirement - Entities offering 800 
series plans serving multiple counties, regions, or the nation are allowed to vary premium and 
cost sharing between defined market areas within the same employer/union-sponsored group 
plan.  
 
Condition: The premium variations must be based on objective market information 
demonstrating verifiable differences in medical costs between the market areas. The MAO 
must have documentation validating the medical cost variation in the market areas comprised 
by the plan.  
 
Requirement waived/modified: 42 CFR 422.111(d)(2)  (Uniform premium requirement).  20.4.2  X  X  X 
   
Waiver or Modification:  Premium Subsidization by Employer/Union Group Health Plan 
Sponsors - EGHP sponsors can subsidize different premium amounts for different classes of 
enrollees provided: (1) such classes are reasonable and based on objective business criteria 
(e.g., years of service, date of retirement, business location, job category, and nature of 
compensation); (2) premiums do not vary for individuals within a given class of enrollees; and 
 
  Chapter 9  Applicability 
Section   
DESCRIPTION OF WAIVERS  Indiv.   EGWP:  EGWP: 
Plan  800  Direct 
Series  Contract 
(3) all direct subsidy payments received from CMS are passed through to the beneficiary in the 
form of reduced premiums. 
 
Conditions:  MAOs and PDP sponsors offering 800 series plans are required to have a written 
agreement with their EGHP sponsors stating that the MAO will satisfy the waiver 
requirements regarding premiums.  MAOs and PDP sponsors are required to retain these 
agreements and provide CMS (or its designees) access to them in accordance with 42 CFR 
422.503(d) and 422.504(d) and (e), and 42 CFR 423.504(d) and 423.505(d) and (e).  
 
Requirement waived/modified: 42 CFR 422 (Uniform premium requirement).  20.4.3  N/A  X  N\A 
 
Waiver or Modification:  Charging Different Premiums to Different Employer/Union Group 
Health Plan Sponsors - MAOs sponsors offering 800 series plans can negotiate with and vary 
the premium amount charged to different EGHP sponsors, including the ability to experience 
rate EGHP sponsors to determine premiums. 
 
Requirement waived/modified:  42 CFR 423.293(a) and 422.262 (f) (Requirement to permit  20.5  N/A  X  X 
MAO and PDP enrollees, at their option, to pay premiums through premium withhold).   
   
Waiver or modification:  Premium Withhold  There is no premium withhold option available 
to EGWP enrollees.  MAOs and PDP sponsors must bill the beneficiary or EGHP sponsor 
directly. 
 
 
  ENROLLMENT REQUIREMENT WAIVERS 
 
 
  Chapter 9  Applicability 
Section   
DESCRIPTION OF WAIVERS  Indiv.   EGWP:  EGWP: 
Plan  800  Direct 
Series  Contract 
Requirement waived/modified: 42 CFR 422.60(a). (Acceptance of enrollees).  30.1  X  X  X 
 
Waiver or Modification:  Enrollment Eligibility - In general, MAOs have to accept all 
Medicare-eligible beneficiaries who reside in their service area as set forth in 42 CFR 
422.60(a). EGWPs are not subject to this requirement. Instead, EGWPs must restrict 
enrollment solely to those Medicare eligible individuals who are also eligible for the 
employer/union sponsors employment-based health coverage. Medicare eligible spouses and 
dependents of participants in the employer/union sponsors plan may be permitted to enroll in 
these EGWPs based on the employer/union sponsors eligibility rules regardless of whether or 
not the participant is Medicare-eligible.  
 
Requirement waived/modified: 42 CFR 422.514(a).  (Minimum enrollment requirements).  30.2  N/A  X  X 
 
Waiver or Modification:  Minimum Enrollment Requirement - The minimum enrollment 
requirements at 42 CFR 422.514(a) do not apply to EGWPs. 
 
Requirement waived/modified: 42 CFR 422.50(a)(2). (Prohibition of Enrollment of ESRD  30.3  X  X  X 
members). 
 
Waiver or Modification: Enrollment of End Stage Renal Disease (ESRD) members - 
Employer/union group members who have ESRD may be allowed to enroll in employer/union-
sponsored MA plans, under any one of four scenarios described in the Medicare Managed 
Care Manual, Chapter 2 (Medicare Advantage Enrollment and Disenrollment).  
 
Conditions:  
The MAOs that apply this waiver must agree to apply it consistently; MAOs must consistently 
 
  Chapter 9  Applicability 
Section   
DESCRIPTION OF WAIVERS  Indiv.   EGWP:  EGWP: 
Plan  800  Direct 
Series  Contract 
allow enrollment of employer/union group ESRD beneficiaries in all plan benefit packages 
offered by the MAO under a particular MA contract.  
 
Requirement waived/modified: 42 CFR 422.50(a)(1). (Eligibility to Elect MA plans).  30.4  N/A  X  X 
 
Waiver or Modification: Enrollment of Part B-Only Members - MAOs can develop plans for 
Part B-only EGWPs for Medicare beneficiaries who are members of employer/union groups. 
In permitting such plans, CMS is waiving the existing regulations that prohibit individuals 
only eligible for Part B from enrolling in MA plans.  
Requirement waived/modified:  42 CFR 422.62(a)(2)(iii). (Annual Coordinated Election  30.5  N/A  X  X 
Period). 
 
Waiver or Modification: Annual Coordinated Election Period  -Employer/union group 
sponsored enrollments in EGWPs or individual MA plans may have different annual open 
enrollment periods than the coordinated annual election period. 
 
Requirement waived/modified:  42 CFR 422.60 (Election Process).  30.6  X  X  X 
 
Waiver or Modification:  Group Enrollment / Disenrollment  - All EGWPs or individual MA 
plans may group enroll/disenroll employer/union-sponsored group health plan Medicare 
beneficiaries (see the Medicare Managed Care Manual, Chapter 2 (Medicare Advantage 
Enrollment and Disenrollment)).  
 
 
Requirement waived/modified:  Appendix 1 (Summary of Notice Requirements) of the  30.7  X  X  X 
Medicare Managed Care Manual, Chapter 2 (Medicare Advantage Enrollment and 
 
  Chapter 9  Applicability 
Section   
DESCRIPTION OF WAIVERS  Indiv.   EGWP:  EGWP: 
Plan  800  Direct 
Series  Contract 
Disenrollment).  
 
Waiver or Modification:  Beneficiary Enrollment Notification Requirements - Certain notices 
in the Medicare Managed Care Manual, Chapter 2 (Medicare Advantage Enrollment and 
Disenrollment), Appendix 1 (27, 27a, 28, 28a, 29) are not applicable to EGHP sponsored 
enrollments in individual plans or EGWPs.  However, the other notice requirements apply. 
 
Requirement waived/modified: Simultaneous Enrollment in an MA Local or Regional  30.8  N/A  X  N\A 
Coordinated Care Plan and a Stand-Alone PDP. 
 
 
Waiver or Modification: Simultaneous Enrollment in an MA Local or Regional Coordinated 
Care Plan and a Stand-Alone PDP  This waiver has been extended to Regional Coordinated 
Care Plan enrollees. This waiver was previously limited to Local Coordinated Care Plan 
enrollees. Members of 800-series Regional PPO EGWPs and local coordinated care plan 
EGWP enrollees may enroll in 800-series stand-alone PDPs, provided that the MAOs and  
work closely together with the employer/union sponsor to provide coordinated care and 
disease management services between the MA and the PDP portion of the benefit.  
 
 
                                   SERVICE AREA REQUIREMENT WAIVERS 
 
Requirement waived/modified:  (Individual MA plans and EGWPs must have the same service  40.1  X  X  N/A 
area). 
 
 
  Chapter 9  Applicability 
Section   
DESCRIPTION OF WAIVERS  Indiv.   EGWP:  EGWP: 
Plan  800  Direct 
Series  Contract 
Waiver or Modification: Service Area Waiver for Local MA-Only and Local MA-PD Plans 
to Offer Coverage Throughout the State - If an MAO provides coverage to individuals in any 
part of a State, it can offer an EGWP in any area within that State or throughout the entire 
State (provided the EGWP service area is properly requested and defined in HPMS). For Part 
C benefits, the MAO is responsible for ensuring that CMS provider network adequacy 
requirements are met and that consistent benefits are provided to an employer/union group 
plan sponsors enrollees.  
 
Requirement waived/modified:  Service area extension and network adequacy waiver for MA  40.2  X  X  N/A 
local coordinated care plans. 
 
Waiver or Modification:  Service Area Extension and Network Adequacy Waiver for MA 
Local Coordinated Care Plan  An MAO offering a coordinated care plan in a given service 
area (i.e., State) can extend coverage to an employer/union sponsors beneficiaries residing 
outside of that service area when the MAO, either itself or through partnerships (i.e., 
arrangements) with other MAOs, is able to meet CMS provider network adequacy 
requirements and provide consistent benefits to those beneficiaries. 
 
  MARKETING REQUIREMENT WAIVERS 
 
Requirement waived/modified:  42 CFR 422.2262 and 423.2262, 2264, and 2266.  (Approval  50.1.1    X  X 
of marketing materials and enrollment forms). 
 
Waiver or Modification:  Rules for Direct Contract and 800 series Plans  CMS waived 
 
  Chapter 9  Applicability 
Section   
DESCRIPTION OF WAIVERS  Indiv.   EGWP:  EGWP: 
Plan  800  Direct 
Series  Contract 
prior review and approval requirements for all marketing materials and election forms 
contained in 42 CFR 422.2262 for all EGWPs.   This includes waiving the restriction against 
communicating with Medicare-eligible beneficiaries prior to October 1st.  
 
Requirement waived/modified: 42 CFR 422.2262.  50.1.2  X     
 
Waiver or Modification: Rules for Employer/Union Group Plan-Sponsored Individual MA 
Plans  This waiver allows an MAO to customize disclosure materials for a particular 
employer/union group health plan sponsor that offers coverage to its Medicare beneficiaries 
using an individual MA Plan. 
 
Requirement waived/modified:  42 CFR 422.2262 (Rules prohibiting entities from offering  50.2  X  X  X 
customized materials). 
 
Waiver or Modification:  Customizing Medicare Disclosure Materials and Election Forms  
CMS has waived any rules prohibiting EGHPs from customizing disclosure materials to the 
extent those customized materials will more clearly and accurately describe the benefits 
available to employer/union group Medicare beneficiaries. Note that this waiver also allows 
customization of disclosure materials for employer-sponsored enrollments in individual MA 
plans.  
 
Conditions:  CMS reserves the right to request and review these materials in the event of 
beneficiary complaints or for any other reason in order to ensure the information accurately 
and adequately informs beneficiaries about their rights and obligations under the plan.  MAOs 
may retain one template version of dissemination materials if materials are identical for 
multiple EGHP sponsors except for EGHP identifier information. 
 
  Chapter 9  Applicability 
Section   
DESCRIPTION OF WAIVERS  Indiv.   EGWP:  EGWP: 
Plan  800  Direct 
Series  Contract 
 
Requirement waived/modified:  42 CFR 422.111 (Issuance of materials 15 days before the  50.3  X  X  X 
beginning of the AEP). 
 
Waiver or Modification: Timing for Issuance of Employer/Union Sponsored Group Plan 
Medicare Disclosure Materials - Employer sponsored 800 series plans, Direct Contract 
plans or individual MA plans that are subject to Medicare marketing and disclosure 
requirements are also subject to any applicable timing requirements for issuance of these 
materials. However, CMS has waived or modified applicable requirements in certain 
circumstances, including where a particular employer/union sponsor has an open enrollment 
period that differs from the AEP. In this situation, the timing for dissemination materials may 
be based on the EGHP sponsors plan year.  
 
Requirement waived/modified:  42 CFR 422.111 (Alternative Disclosure Waiver).  50.4  X  X  X 
 
Waiver or Modification:  Plans with Employer/Union Sponsors Eligible for Waiver of 
Medicare Disclosure Requirements - When the EGHP sponsor is subject to alternative 
dissemination requirements (e.g., those required by ERISA) and the EGHP sponsor complies 
with such alternative requirements, the specific dissemination requirements under 42 CFR 
422.111 are waived. 
 
Conditions:  CMS reserves the right to request and review these materials in the event of 
beneficiary complaints or for any other reason it determines to ensure the information 
accurately and adequately informs Medicare beneficiaries about their rights and obligations 
under the plan.  MAO sponsors are required to retain these dissemination materials and 
provide access to these written materials to CMS (or its designees) in accordance with 42 CFR 
 
  Chapter 9  Applicability 
Section   
DESCRIPTION OF WAIVERS  Indiv.   EGWP:  EGWP: 
Plan  800  Direct 
Series  Contract 
422.516(d).  
 
Requirement waived/modified:  CMS and Marketing Guidelines ID requirements.  50.5  N/A  X  X 
 
Waiver or Modification:  Identification (ID) Card Requirements - EGWP sponsors may 
provide enrollees with one combination member ID incorporating medical, Part D, and 
employer-sponsored non-Medicare supplemental benefits.  It is permissible to include the 
name and/or logo of the EGHP sponsor on the ID card; this is not considered co-branding. 
 
Requirement waived/modified: Marketing Guidelines (Agent and Broker Licensure and  50.6  X  X  X 
Training requirements). 
 
Waiver or Modification: Agent and Broker Licensure and Training Requirements - 
Representatives of an MAO or those representatives of employer/union group plan sponsors or 
others acting on their behalf (e.g., their employees, benefit consultants, third party 
administrators) who conduct educational, enrollment or informational events for retirees of 
employer/union sponsors are not required to be licensed for these purposes. These activities do 
not constitute marketing or sales activities.  
 
Requirement waived/modified:  42 CFR 422.64 (Providing information about MA coverage).  50.7  N/A  X  X 
 
Waiver or modification:  Providing Information to CMS about the MA Program - Since 
EGHP sponsored MA plans are not available for general enrollment, the requirement to report 
certain information annually to CMS for purposes of inclusion in the Medicare & You 
publications and on the CMS website (e.g., Medicare Plan Finder) is waived. 
 
 
  Chapter 9  Applicability 
Section   
DESCRIPTION OF WAIVERS  Indiv.   EGWP:  EGWP: 
Plan  800  Direct 
Series  Contract 
Requirement waived/modified:  42 CFR 422.111(f)(12) (Providing specific information on a  50.8  N/A  X  X 
website). 
 
Waiver or modification:  Requirement for MA Organization to Provide Specific Information 
via a Website - MAOs will not be required to provide any information concerning EGWPs on 
the sponsors website, since these kinds of EGHPs are not available for enrollment for the 
general public. 
 
Requirement waived/modified:  42 CFR 422.111(h)(1) (Call center hour requirements).  50.9    X  X 
 
Waiver or modification:  Beneficiary Customer Service Call Center Requirements  Direct 
Contract and 800 series EGWPs are allowed to operate beneficiary customer service call 
center hours for their employer/union group health plan-only enrollees that differ from the 
requirements for MA plans offered to individual Medicare beneficiaries.  
 
Conditions:  MAOs must ensure that a sufficient mechanism is available to respond to enrollee 
inquiries during normal business hours.  CMS may review the adequacy of these call center 
hours and potentially require expanded customer service call centers in the event of complaints 
or for other reasons in order to ensure the call center hours are sufficient to meet enrollee 
needs. 
 
 
  WAIVERS ONLY APPLICABLE TO DIRECT CONTRACT EGWPs 
 
Requirement waived/modified:  42 CFR 422.400(a) and 42 CFR 422.503 (b)(2) (State  60.1 and   N\A  N\A  X 
60.2 
 
  Chapter 9  Applicability 
Section   
DESCRIPTION OF WAIVERS  Indiv.   EGWP:  EGWP: 
Plan  800  Direct 
Series  Contract 
Licensure). 
Waiver or modification:  State Licensure and Financial Solvency An employer/union 
applying to become an MAO solely for purposes of providing coverage to its members will not 
have to meet the State licensing requirements set forth at 42 CFR 422.400(a) and 42 CFR 
422.503(b)(2) as a condition of being an MAO.   
 
Condition:  CMS requires these entities to meet certain financial solvency standards. CMS 
requires these entities to demonstrate that their fiscal soundness is commensurate with their 
financial risk, and that through other means, they can ensure that claims for benefits paid for 
by CMS and beneficiaries are covered.  
 
Requirement waived/modified:  42 CFR 422.503(b)(4)(iv)-(v) (Bonding and Insurance).  60.3  N\A  N\A  X 
 
Waiver or modification:  Bonding and Insurance - On a case-by-case basis, CMS may 
provide flexibility to Direct Contract employer/union contracting as an MAO by waiving 
bonding and insurance requirements provided the entity demonstrates it satisfies different 
federal or state legal standards (e.g., ERISA bonding requirements). 
 
 
Requirement waived/modified:  42 CFR 422.516(a) (Reporting requirements).  60.5  N\A  N\A  X 
 
Waiver or modification:  Reporting Requirements  CMS has modified the reporting 
requirements for Direct Contract EGWPs to allow information to be reported to enrollees and 
to the general public to the extent required by other law (including ERISA or securities laws) 
or by employer contract. 
 
  Transmittals Issued for this Chapter 
Rev #  Issue Date  Subject  Impl Date  CR# 
R111MCM 05/03/2013  Chapter 9, Employer/Union Sponsored  05/03/2012  N/A 
Group Health Plan 
R90MCM  11/07/2008  Chapter 9-Initial Release of chapter  11/07/2008  N/A 
Back to top of chapter