Document:

Addendum to Agreement Form for Medicare Voluntary Presciption Drug Plan

 Exhibit 10.3 
  
 ADDENDUM TO MEDICARE MANAGED CARE CONTRACT PURSUANT TO 
 SECTIONS 1860D-1 THROUGH 1860D-42 OF THE SOCIAL SECURITY ACT 
 FOR THE
OPERATION OF A VOLUNTARY MEDICARE PRESCRIPTION 
 DRUG PLAN 
  
 The Centers for Medicare & Medicaid Services (hereinafter referred to as “CMS”) and (See Chart), a Medicare managed care
organization (hereinafter referred to as the MA-PD Sponsor) agree to amend the contract (INSERT “H” OR “R” NUMBER) governing the MA-PD Sponsor’s operation of a Part C plan described in Section 1851(a)(2)(A) of
the Social Security Act (hereinafter referred to as “the Act”) or a Medicare cost plan to include this addendum under which the MA-PD Sponsor shall operate a Voluntary Medicare Prescription Drug Plan pursuant to sections 1860D-1 through
1860D-42 (with the exception of section 1860D-22 and 1860D-31) of the Act. 
  
 This addendum is made pursuant to Subpart L of 42 CFR Part 417 (in the case of cost plan sponsors offering a Part D benefit) and Subpart K of 42 CFR Part 422 (in the case of an MA-PD Sponsor offering a Part C plan). 
  
 NOTE: For purposes of this addendum, unless otherwise noted, reference to an “MA-PD
Sponsor” or “MA-PD Plan” is deemed to include a cost plan sponsor or a MA private fee-for-service contractor offering a Part D benefit. 

 Article I 
 Medicare Voluntary Prescription Drug Benefit 
  

	A.	The MA-PD Sponsor agrees to operate one or more Medicare Voluntary Prescription Drug Plans as described in its application and related materials, including but not limited to all
the attestations contained therein and all supplemental guidance, for Medicare approval and in compliance with the provisions of this addendum, which incorporates in its entirety the Solicitation For Applications from Prescription Drug Plans
released on January 21, 2005 (as revised on March 9, 2005) [applicable to Medicare Part C contractors] or the Solicitation for Applications from Cost Plan Sponsors released on January 21, 2005 (as revised on March 9,
2005) [applicable to Medicare cost plan contractors] (hereinafter collectively referred to as “the addendum”). The MA-PD Sponsor also agrees to operate in accordance with the regulations at 42 CFR §423.1 through 42 CFR
§423.910 (with the exception of Subparts Q, R, and S), sections 1860D-1 through 1860D-42 (with the exception of sections 1860D-22(a) and 1860D-31) of the Social Security Act, and the applicable solicitation identified above, as well as all
other applicable Federal statutes, regulations, and policies. This addendum is deemed to incorporate any changes that are required by statute to be implemented during the term of this addendum and any regulations or policies implementing or
interpreting such statutory provisions. 

  

	B.	CMS agrees to perform its obligations to the MA-PD Sponsor consistent with the regulations at 42 CFR §423.1 through 42 CFR §423.910 (with the exception of Subparts Q, R,
and S), sections 1860D-1 through 1860D-42 (with the exception of sections 1860D-22(a) and 1860D-31) of the Social Security Act, and the applicable solicitation, as well as all other applicable Federal statutes, regulations, and policies.

  

	C.	CMS agrees that it will not implement, other than at the beginning of a calendar year, regulations under 42 CFR Part 423 that impose new, significant regulatory requirements on the
MA-PD Sponsor. This provision does not apply to new requirements mandated by statute. 

  

	D.	This addendum is in no way intended to supersede or modify 42 CFR, Parts 417, 422 or 423. Failure to reference a regulatory requirement in this addendum does not affect the
applicability of such requirements to the MA-PD Sponsor and CMS. 

  
 Article II 
 Functions to be Performed by the MA-PD Sponsor 
  

	A.	ENROLLMENT 

  

	 	1.	MA-PD Sponsor agrees to enroll in its MA-PD plan only Part D-eligible beneficiaries as they are defined in 42 CFR §423.30(a) and who have elected to enroll in MA-PD
Sponsor’s Part C or Section 1876 benefit. 

  

 2 

	 	2.	If the MA-PD Sponsor is a cost plan sponsor, the MA-PD Sponsor acknowledges that its Section 1876 plan enrollees are not required to elect enrollment in its Part D plan.

  

	B.	PRESCRIPTION DRUG BENEFIT 

  

	 	1.	MA-PD Sponsor agrees to provide the required prescription drug coverage as defined under 42 CFR §423.100 and, to the extent applicable, supplemental benefits as defined in 42
CFR §423.100 and in accordance with Subpart C of 42 CFR Part 423. MA-PD Sponsor also agrees to provide Part D benefits as described in the MA-PD Sponsor’s Part D bid(s) approved each year by CMS (and in the Attestation of Benefit Plan and
Price, attached hereto). 

  

	 	2.	MA-PD Sponsor agrees to calculate and collect beneficiary Part D premiums in accordance with 42 CFR §§423.286 and 423.293. 

  

	 	3.	If the MA-PD Sponsors is a cost plans sponsor, it acknowledge that its Part D benefit is offered as an optional supplemental service in accordance with 42 CFR
§417.440(b)(2)(ii). 

  

	C.	DISSEMINATION OF PLAN INFORMATION 

  

	 	1.	MA-PD Sponsor agrees to provide the information required in 42 CFR §423.48. 

  

	 	2.	MA-PD Sponsor agrees to disclose information related to Part D benefits to beneficiaries in the manner and the form specified by CMS under 42 CFR §§423.128 and 423.50 and
in the “Marketing Materials Guidelines for Medicare Advantage-Prescription Drug Plans (MA-PDs) and Prescription Drug Plans (PDPs).” 

  

	 	3.	MA-PD Sponsor certifies that all materials it submits to CMS under the File and Use Certification authority described in the Marketing Materials Guidelines are accurate, truthful,
not misleading, and consistent with CMS marketing guidelines. 

  

	D.	QUALITY ASSURANCE/UTILIZATION MANAGEMENT 

  
 MA-PD Sponsor agrees to operate quality assurance, cost, and utilization management, medication therapy management programs, and support electronic
prescribing in accordance with Subpart D of 42 CFR Part 423. 
  

	E.	APPEALS AND GRIEVANCES 

  
 MA-PD Sponsor agrees to comply with all requirements in Subpart M of 42 CFR Part 423 governing coverage determinations, grievances and appeals, and
formulary exceptions. MA-PD Sponsor acknowledges that these requirements are separate and distinct from the appeals and grievances requirements applicable to the MA-PD Sponsor through the operation of its Part C or cost plan benefits. 
  

 3 

	F.	PAYMENT TO MA-PD SPONSOR 

  

	 	1.	MA-PD Sponsor and CMS agree that payment paid for Part D services under the addendum will be governed by the rules in Subpart G of 42 CFR Part 423. 

  

	 	2.	If the MA-PD Sponsor is participating in the Part D Reinsurance Payment Demonstration, described in 70 FR 9360 (Feb. 25, 2005), it affirms that it will not seek payment under the
demonstration for services provided to employer group enrollees. 

  

	G.	BID SUBMISSION AND REVIEW 

  
 If the MA-PD Sponsor intends to participate in the Part D program for the future year, MA-PD Sponsor agrees to submit a future year’s Part D bid,
including all required information on premiums, benefits, and cost-sharing, by the applicable due date, as provided in Subpart F of 42 CFR Part 423 so that CMS and the MA-PD Sponsor may conduct negotiations regarding the terms and conditions of the
proposed bid and benefit plan renewal. MA-PD Sponsor acknowledges that failure to submit a timely bid under this section may affect the sponsor’s ability to offer a Part C plan, pursuant to the provisions of 42 CFR §422.4(c).

  

	H.	COORDINATION WITH OTHER PRESCRIPTION DRUG COVERAGE 

  

	 	1.	MA-PD Sponsor agrees to comply with the coordination requirements with State Pharmacy Assistance Programs (SPAPs) and plans that provide other prescription drug coverage as
described in Subpart J of 42 CFR Part 423. 

  

	 	2.	MA-PD Sponsor agrees to comply with Medicare Secondary Payer procedures as stated in 42 CFR §423.462. 

  

	I.	SERVICE AREA AND PHARMACY ACCESS 

  

	 	1.	The MA-PD Sponsor agrees to provide Part D benefits in the service area for which it has been approved by CMS to offer Part C or cost plan benefits utilizing a pharmacy network and
formulary approved by CMS that meet the requirements of 42 CFR §423.120. 

  

	 	2.	The MA-PD Sponsor agrees to ensure adequate access to Part D-covered drugs at out-of-network pharmacies according to 42 CFR §423.124. 

  

	 	3.	MA-PD Sponsor agrees to provide benefits by means of point-of-service systems to adjudicate prescription drug claims in a timely and efficient manner in compliance with CMS
standards, except when necessary to provide access in underserved areas, I/T/U pharmacies (as defined in 42 CFR §423.100), and long-term care pharmacies (as defined in 42 CFR §423.100). 

  

 4 

	 	4.	MA-PD Sponsor agrees to contract with any pharmacy that meets the MA-PD Sponsor’s reasonable and relevant standard terms and conditions. If MA-PD Sponsor has demonstrated that
it historically fills 98% or more of its enrollees’ prescriptions at pharmacies owned and operated by the MA-PD Sponsor (or presents compelling circumstances that prevent the sponsor from meeting the 98% standard or demonstrates that its Part D
plan design will enable the sponsor to meet the 98% standard during the contract year), this provision does not apply to MA-PD Sponsor’s plan. 

  

	 	5.	The provisions of 42 CFR §423.120(a) concerning the TRICARE retail pharmacy access standard do not apply to MA-PD Sponsor if the Sponsor has demonstrated to CMS that it
historically fills more than 50% of its enrollees’ prescriptions at pharmacies owned and operated by the MA-PD Sponsor. MA-PD Sponsors excused from meeting the TRICARE standard are required to demonstrate retail pharmacy access that meets the
requirements of 42 CFR §422.112 for a Part C contractor and 42 CFR §417.416(e) for a cost plan contractor. 

  

	J.	COMPLIANCE PLAN/PROGRAM INTEGRITY 

  
 MA-PD Sponsor agrees that it will develop and implement a compliance plan that applies to its Part D-related operations, consistent with 42 CFR
§423.504(b)(4)(vi). 
  

	K.	LOW-INCOME SUBSIDY 

  
 MA-PD Sponsor agrees that it will participate in the administration of subsidies for low-income individuals according to Subpart P of 42 CFR Part 423.

  

	L.	BENEFICIARY FINANCIAL PROTECTIONS 

  
 The MA-PD Sponsor agrees to afford its enrollees protection from liability for payment of fees that are the obligation of the MA-PD Sponsor in accordance
with 42 CFR §423.505(g). 
  

	M.	RELATIONSHIP WITH RELATED ENTITIES, CONTRACTORS, AND SUBCONTRACTORS 

  

	 	1.	The MA-PD Sponsor agrees that it maintains ultimate responsibility for adhering to and otherwise fully complying with all terms and conditions of this addendum.

  

	 	2.	The MA-PD Sponsor shall ensure that any contracts or agreements with subcontractors or agents performing functions on the MA-PD Sponsor’s behalf related to the operation of the
Part D benefit are in compliance with 42 CFR §423.505(i). 

  

	N.	CERTIFICATION OF DATA THAT DETERMINE PAYMENT 

  
 MA-PD Sponsor must provide certifications in accordance 42 CFR §423.50(k). 
  

 5 

 Article III 
 Record Retention and Reporting Requirements 
  

	A.	MAINTENANCE OF RECORDS 

  
 MA-PD Sponsor agrees to maintain records and provide access in accordance with 42 CFR §§423.504(d) and 505(d) and (e). 
  

	B.	GENERAL REPORTING REQUIREMENTS 

  
 The MA-PD Sponsor agrees to submit to information to CMS according to 42 CFR §§423.505(f), 423.514, and the “Final Medicare Part D
Reporting Requirements,” a document issued by CMS and subject to modification each program year. 
  

	C.	CMS License For Use of Plan Formulary 

  
 PDP Sponsor agrees to submit to CMS each plan’s formulary information, including any changes to its formularies, and hereby grants to the
Government[, and any person or entity who might receive the formulary from the Government,] a non-exclusive license to use all or any portion of the formulary for any purpose related to the administration of the Part D program, including without
limitation publicly distributing, displaying, publishing or reconfiguration of the information in any medium, including www.medicare.gov, and by any electronic, print or other means of distribution. 
  
 Article IV 
 HIPAA Transactions/Privacy/Security 
  

	A.	MA-PD Sponsor agrees to comply with the confidentiality and enrollee record accuracy requirements specified in 42 CFR §423.136. 

  

	B.	MA-PD Sponsor agrees to enter into a business associate agreement with the entity with which CMS has contracted to track Medicare beneficiaries’ true out-of-pocket costs.

  

 6 

 Article V 
 Addendum Term and Renewal 
  

	A.	TERM OF ADDENDUM 

  
 This addendum is effective from the date of CMS’ authorized representative’s signature through December 31, 2006. This addendum shall be
renewable for successive one-year periods thereafter according to 42 CFR §423.506. MA-PD Sponsor shall not conduct Part D-related marketing activities prior to October 1, 2005 and shall not process enrollment applications prior to
November 15, 2005. MA-PD Sponsor shall begin delivering Part D benefit services on January 1, 2006. 
  

	B.	QUALIFICATION TO RENEW ADDENDUM 

  

	 	1.	In accordance with 42 CFR §423.507, the MA-PD Sponsor will be determined qualified to renew this addendum annually only if— 

  

	 	(a)	CMS informs the MA-PD Sponsor that it is qualified to renew its addendum; and 

  

	 	(b)	The MA-PD Sponsor has not provided CMS with a notice of intention not to renew in accordance with Article VII of this addendum. 

  

	 	2.	Although MA-PD Sponsor may be determined qualified to renew its addendum under this Article, if the MA-PD Sponsor and CMS cannot reach agreement on the Part D bid under Subpart F of
42 CFR Part 423, no renewal takes place, and the failure to reach agreement is not subject to the appeals provisions in Subpart N of 42 CFR Parts 422 or 423. (Refer to Article XI for consequences of non-renewal on the Part C contract and the ability
to enter into a Part C contract.) 

  
 Article VI

 Nonrenewal of Addendum 
  

	A.	NONRENEWAL BY THE MA-PD SPONSOR 

  

	 	1.	MA-PD Sponsor may non-renew this addendum in accordance with 42 CFR 423.507(a). 

  

	 	2.	If the MA-PD Sponsor non-renews this addendum under this Article, CMS cannot enter into a Part D addendum with the organization for 2 years unless there are special circumstances
that warrant special consideration, as determined by CMS. 

  

	B.	NONRENEWAL BY CMS 

  
 CMS may non-renew this addendum under the rules of 42 CFR 423.507(b). (Refer to Article X for consequences of non-renewal on the Part C contract and the
ability to enter into a Part C contract.) 
  

 7 

 Article VII 
 Modification or Termination of Addendum by Mutual Consent 
  
 This addendum may be modified or terminated at any time by written mutual consent in accordance with 42 CFR 423.508. (Refer to Article X for consequences of non-renewal on the Part C contract and the ability to enter
into a Part C contract.) 
  
 Article VIII 
 Termination of Addendum by CMS 
  
 CMS may terminate this addendum in accordance with 42 CFR 423.509. (Refer to Article X for consequences of non-renewal on the Part C contract and the ability to enter
into a Part C contract.) 
  
 Article IX 
 Termination of Addendum by the MA-PD Sponsor 
  

	A.	The MA-PD Sponsor may terminate this addendum only in accordance with 42 CFR 423.510. 

  

	B.	CMS will not enter into a Part D addendum with an organization that has terminated its addendum within the preceding 2 years unless there are circumstances that warrant special
consideration, as determined by CMS. 

  

	C.	If the addendum is terminated under section A of this Article, the MA-PD Sponsor must ensure the timely transfer of any data or files. (Refer to Article X for consequences of
non-renewal on the Part C contract and the ability to enter into a Part C contract.) 

  
 Article X 
 Relationship Between Addendum and Part C Contract or 1876 Cost
Contract 
  

	A.	MA-PD Sponsor acknowledges that, if it is a Medicare Part C contractor, the termination or nonrenewal of this addendum by either party may require CMS to terminate or non-renew the
Sponsor’s Part C contract in the event that such non-renewal or termination prevents the MA-PD Sponsor from meeting the requirements of 42 CFR §422.4(c), in which case the Sponsor must provide the notices specified in this contract, as
well as the notices specified under Subpart K of 42 CFR Part 422. MA-PD Sponsor also acknowledges that Article X.B. of this addendum may prevent the sponsor from entering into a Part C contract for two years following an addendum termination or
non-renewal where such non-renewal or termination prevents the MA-PD Sponsor from meeting the requirements of 42 CFR §422.4(c). 

  

	B.	The termination of this addendum by either party shall not, by itself, relieve the parties from their obligations under the Part C or cost plan contracts to which this document is
an addendum. 

  

 8 

	C.	In the event that the MA-PD Sponsor’s Part C or cost plan contract (as applicable) is terminated or nonrenewed by either party, the provisions of this addendum shall also
terminate. In such an event, the MA-PD Sponsor and CMS shall provide notice to enrollees and the public as described in this contract as well as 42 CFR Part 422, Subpart K or 42 CFR Part 417, Subpart K, as applicable. 

  
 Article XI 
 Intermediate Sanctions 
  
 The MA-PD Sponsor shall be subject to sanctions and civil monetary penalties, consistent with Subpart O of 42 CFR Part 423. 
  
 Article XII 
 Severability

  
 Severability of the addendum shall be in accordance with 42 CFR
§423.504(e). 
  
 Article XIII 
 Miscellaneous 
  

	A.	DEFINITIONS: Terms not otherwise defined in this addendum shall have the meaning given such terms at 42 CFR Part 423 or, as applicable, 42 CFR Part 422 or Part 417.

  

	B.	ALTERATION TO ORIGINAL ADDENDUM TERMS: The MA-PD Sponsor agrees that it has not altered in any way the terms of the MA-PD addendum presented for signature by CMS. MA-PD Sponsor
agrees that any alterations to the original text the MA-PD Sponsor may make to this addendum shall not be binding on the parties. 

  

	C.	ADDITIONAL CONTRACT TERMS: The MA-PD Sponsor agree to include in this addendum other terms and conditions in accordance with 42 CFR §423.505(j). 

  

	D.	CMS APPROVAL TO BEGIN MARKETING AND ENROLLMENT ACTIVITIES: The MA-PD Sponsor agrees that it must complete CMS operational requirements related to its Part D benefit prior to
receiving CMS approval to begin MA-PD plan marketing activities relating to its Part D benefit. Such activities include, but are not limited to, establishing and successfully testing connectivity with CMS systems to process enrollment applications
(or contracting with an entity qualified to perform such functions on MA-PD Sponsor’s behalf) and successfully demonstrating the capability to submit accurate and timely price comparison data. To establish and successfully test connectivity,
the PDP Sponsor must, 1) establish and test physical connectivity to the CMS data center, 2) acquire user identifications and passwords, 3) receive, store, and maintain data necessary to perform enrollments and send and receive transactions to and
from CMS, and 4) check and receive transaction status information. 

  

 9Addendum to Agreement Form of Medicare Advantage Prescription Drug Plan

 Exhibit 10.4 
  
 MA-PD EMPLOYER/UNION-ONLY GROUP CONTRACT ADDENDUM 
  

EMPLOYER/UNION-ONLY GROUP ADDENDUM TO CONTRACT WITH 
 APPROVED ENTITY PURSUANT TO SECTIONS 1851 THROUGH 1859 AND 
 1860D-1 THROUGH 1860D-42 OF THE SOCIAL
SECURITY ACT FOR THE 
 OPERATION OF A MEDICARE ADVANTAGE PRESCRIPTION DRUG PLAN 
  
 The Centers for Medicare & Medicaid Services (hereinafter referred to as
“CMS”) and (See Chart), a Medicare Advantage Organization (hereinafter referred to as the “MA Organization”) agree to amend the contract _______(INSERT “H” OR “R” NUMBER) governing the MA
Organization’s operation of a Medicare Advantage plan described in section 1851(a)(2)(A) or section 1851(a)(2)(C) of the Social Security Act (hereinafter referred to as “the Act”), including all attachments, addenda, and amendments
thereto, to include the provisions contained in this Addendum (collectively hereinafter referred to as the “contract”), under which the MA Organization shall offer Employer/Union-Only Group MA-PD Plans (hereinafter referred to as
“employer/union-only group MA-PDs”) in accordance with the waivers granted by CMS under section 1857(i) of the Act. The terms of this Addendum shall only apply to MA-PD plans offered exclusively to employers/unions. 
  
 This Addendum is made pursuant to Subparts K of 42 CFR Parts 422 and 423. 
  

 Page 1 of 9 

 MA-PD EMPLOYER/UNION-ONLY GROUP CONTRACT ADDENDUM 
  

 ARTICLE I 
 EMPLOYER/UNION-ONLY GROUP MEDICARE ADVANTAGE 
 PRESCRIPTION DRUG PLANS 
  

	A.	MA Organization agrees to operate one or more employer/union-only group MA-PDs in accordance with the terms of this Addendum, the Medicare Advantage contract, which incorporates in
its entirety the Solicitation For Applications from Prescription Drug Plans released on January 21, 2005 (as revised on March 9, 2005), as modified by the 2006 Part D Application Instructions for Employer/Union Sponsored Retiree Group
Plans (as revised April 19, 2005) (except for requirements contained therein that are expressly waived or modified by this Addendum), all provisions of Federal statutes, regulations, and policies applicable to MA organizations and MA plans
(except to the extent any such provisions are expressly waived or modified by this Addendum), and any employer/union-only group waiver guidance. MA Organization also agrees to operate one or more employer/union-only group MA-PDs in accordance with
42 CFR Parts 422 and 423 (with the exception of Subparts Q, R, and S), sections 1851 through 1859 and 1860D-1 through 1860D-42 of the Act (with the exception of 1860D-22(a) and 1860D-31), and the solicitation, as well as all other applicable Federal
statutes, regulations, and policies, including any employer/union-only group waiver guidance. 

  

	B.	This Addendum is deemed to incorporate any changes that are required by statute to be implemented during the term of the contract, and any regulations and policies implementing or
interpreting such statutory provisions. 

  

	C.	In the event of any conflict between the employer/union-only group waiver guidance issued prior to the execution of the contract and this Addendum, the provisions of this Addendum
shall control. In the event of any conflict between the employer/union-only group waiver guidance issued after the execution of the contract and this Addendum, the provisions of the employer/union-only group guidance shall control.

  

	D.	This Addendum is in no way intended to supersede or modify 42 CFR Parts 422 and 423 or sections 1851 through 1859 and 1860D-1 through D-42 of the Act, except as specifically
provided in applicable employer/union-only group waiver guidance and/or in this Addendum. Failure to reference a statutory or regulatory requirement in this Addendum does not affect the applicability of such requirement to the MA Organization and
CMS. 

  

	E.	The provisions of this Addendum apply to all employer/union-only group MA-PDs offered by the MA Organization. In the event of any conflict between the provisions of this Addendum
and any other provision of the contract, the terms of this Addendum shall control. 

  

 Page 2 of 9 

 MA-PD EMPLOYER/UNION-ONLY GROUP CONTRACT ADDENDUM 
  

 ARTICLE II 
 FUNCTIONS TO BE PERFORMED BY THE MEDICARE ADVANTAGE 
 ORGANIZATION 
  

	A.	PROVISION OF MA BENEFITS 

  

	 	1.	MA Organization agrees to provide enrollees in each of its employer/union-only group MA-PDs the basic benefits (hereinafter referred to as “basic benefits”) as required
under 42 CFR §422.101 and, to the extent applicable, supplemental benefits under 42 CFR §422.102 and as established in the MA Organization’s final benefit and price bid proposal as approved by CMS. 

  

	 	2.	MA Organization may swap different types of mandatory supplemental benefits and optional supplemental benefits (as defined in 42 CFR §422.2) (hereinafter referred to as
“supplemental benefits”) of equal actuarial value in employer/union-only group MA-PDs. 

  

	 	3.	MA Organization may modify the cost sharing (e.g., coinsurance, copayments, deductibles) of basic and supplemental benefits offered in employer/union-only group MA-PDs by providing
a higher benefit level and/or a modified premium to employer/union-only groups contracting with MA Organization. The uniformity of premium, benefits, and cost-sharing requirement of 42 CFR §422.100(d)(2) shall not apply to such modifications.
The overall value of each modified benefit offered to employer/union-only groups must be actuarially equivalent to the basic and/or supplemental benefit offered in the employer/union-only group MA-PD and the modification must not have the effect of
denying or discouraging access to covered medically-necessary health care items and services as set forth in 42 CFR §422.100(f)(2). 

  

	 	4.	The requirements in section 1852 of the Act and 42 CFR §422.100(c)(1) pertaining to the offering of benefits covered under Medicare Part A and in section 1851 of the Act and 42
CFR §422.50(a)(1) pertaining to who may enroll in an MA-PD are waived for employer/union-only group MA-PD enrollees who are not entitled to Medicare Part A. 

  

	 	5.	For employer/union-only group MA-PDs offering non-calendar year coverage, MA Organization may determine basic and supplemental benefits (including deductibles, out-of-pocket limits,
etc.) on a non-calendar year basis subject to the following requirements: 

  
 (a) Applications, bids, and other submissions to CMS must be submitted on a calendar year basis; and 
  
 (b) CMS payments will be determined on a calendar year basis. 
  

 Page 3 of 9 

 MA-PD EMPLOYER/UNION-ONLY GROUP CONTRACT ADDENDUM 
  

	 	6.	For MA-PDs that have a monthly beneficiary rebate described in 42 CFR § 422.266: 

  
 (a) MA Organization may vary the form of rebate allocation so that the rebates vary between employer/union groups within the
plan benefit package for an employer/union group to whom MA Organization offers the plan, with the exception of a rebate credited toward the reduction of the Part B premium. Any reduction of the Part B premium through crediting of the rebate must be
available to all members of the plan at the same level, regardless of the enrollee’s employer/union group affiliation; and 
  
 (b) MA Organization must: 
  
 (i) ensure Part B premium buy-downs are the same for all enrollees; 
  
 (ii) ensure that the total monthly rebate amount for the plan total rebates per enrollee are uniform across employer groups
in the plan and that all rebates are accounted for and used only for the purposes provided in the Act; and 
  
 (iii) retain documentation that supports the use of all of the rebates on a detailed basis and must provide access to this documentation in accordance
with the requirements of 42 CFR §422.501. 
  

	B.	PROVISION OF PRESCRIPTION DRUG BENEFITS 

  

	 	1.	(a) Except as provided in II.B.1(b), MA Organization agrees to provide basic prescription drug coverage, as defined under 42 CFR §423.100, under any employer/union-only
group MA-PD, in accordance with Subpart C of 42 CFR Part 423. MA Organization also agrees to provide Part D benefits under any employer/union-only group MA-PD as described in MA Organization’s bid approved each year by CMS.

  
 (b) CMS agrees that MA Organization will not be
subject to the actuarial equivalence requirement set forth in 42 CFR §423.104(e)(5) with respect to any employer/union-only group MA-PD and may provide less than the defined standard coverage between the deductible and initial coverage limit.
MA Organization agrees that its basic prescription drug coverage under any employer/union-only group MA-PD will satisfy all of the other actuarial equivalence standards set forth in 42 CFR §423.104, including but not limited to the requirement
set forth in 42 CFR §423.104(e)(3) that the plan has a total or gross value that is at least equal to the total or gross value of defined standard coverage. 
  
 (c) CMS agrees that nothing in this Addendum prevents MA Organization from offering benefits in addition to basic
prescription drug coverage to employers/unions. Such additional benefits offered pursuant to private 

  

 Page 4 of 9 

 MA-PD EMPLOYER/UNION-ONLY GROUP CONTRACT ADDENDUM 
  

 
agreements between MA Organization and employers/unions will be considered non-Medicare Part D benefits. MA Organization agrees that such additional benefits
may not reduce the value of basic prescription drug coverage (e.g., additional benefits cannot impose a cap that would preclude enrollees from realizing the full value of such basic prescription drug coverage). MA Organization may charge
employers/unions up to 100% of the value of the additional benefits as part of the monthly beneficiary premium. 
  
 (d) MA Organization agrees that any additional non-Medicare Part D benefits offered to an employer/union will always pay primary to the subsidies provided
by CMS to low-income individuals under Subpart P of 42 CFR Part 423 (the “Low-Income Subsidy”). 
  

	 	2.	MA Organization agrees enrollees of employer/union-only group MA-PDs will not be permitted to make payment of premiums under 42 CFR §423.293(a) through withholding from the
enrollee’s Social Security, Railroad Retirement Board, or Office of Personnel Management benefit payment. 

  

	 	3.	MA Organization agrees it shall obtain written agreements from each employer/union that provide that the employer/union may determine how much of an enrollee’s Part D monthly
beneficiary premium it will subsidize, subject to the restrictions set forth in (a) through (e) below. MA Organization agrees to retain these written agreements with employers/unions and provide access to these written agreements to CMS in
accordance with 42 CFR §§423.504(d) and 423.505(d) and (e). 

  
 (a) The employer/union can subsidize different amounts for different classes of enrollees in the employer/union-only group MA-PD provided 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 v. hourly). Different classes cannot be based on eligibility for the Low Income Subsidy. 
  
 (b) The employer/union cannot vary the premium subsidy for individuals
within a given class of enrollees. 
  
 (c) The employer/union
cannot charge an enrollee for prescription drug coverage provided under the plan more than the sum of his or her monthly beneficiary premium attributable to basic prescription drug coverage and 100% of the monthly beneficiary premium attributable to
his or her supplemental prescription drug coverage (if any). 
  
 (d) For all enrollees eligible for the Low Income Subsidy, the low income premium subsidy amount will first be used to reduce the portion of the monthly beneficiary premium attributable to basic prescription drug coverage paid by the
enrollee, with any remaining portion of the premium subsidy amount then applied 

  

 Page 5 of 9 

 MA-PD EMPLOYER/UNION-ONLY GROUP CONTRACT ADDENDUM 
  

 
toward the portion of the monthly beneficiary premium attributable to basic prescription drug coverage paid by the employer/union. 
  
 (e) If the low income premium subsidy amount for which an enrollee is
eligible is less than the portion of the monthly beneficiary premium paid by the enrollee, then the employer/union should communicate to the enrollee the financial consequences for the beneficiary of enrolling in the employer/union-only group MA-PD
as compared to enrolling in another Part D plan with a monthly beneficiary premium equal to or below the low income premium subsidy amount. 
  

	 	4.	For non-calendar year employer/union-only group MA-PDs, MA Organization may determine benefits (including deductibles, out-of-pocket limits, etc.) on a non-calendar year basis
subject to the following requirements: 

  
 (a)
Applications, formularies, bids and other submissions to CMS must be submitted on a calendar year basis; 
  
 (b) The employer/union-only group MA-PD must be actuarially equivalent to defined standard coverage for the portion of its plan year that falls in a given
calendar year. An employer/union-only group MA-PD will meet this standard if it is actuarially equivalent for the calendar year in which the plan year starts and no design change is made for the remainder of the plan year. In no event can MA
Organization increase during the plan year the annual out-of-pocket threshold; 
  
 (c) After an enrollee’s incurred costs exceed the annual out-of-pocket threshold, the employer/union-only group MA-PD must provide coverage that is at least actuarially equivalent to that provided under standard
prescription drug coverage; eligibility for such coverage can be determined on a plan year basis. 
  

	C.	ENROLLMENT REQUIREMENTS 

  

	 	1.	MA Organization agrees to restrict enrollment in an employer/union-only group MA-PD to those individuals eligible for the employer’s/union’s employment-based group
coverage. 

  

	 	2.	MA Organization will not be subject to the requirement to offer the employer/union-only group MA-PD to all Medicare eligible beneficiaries residing in its service area as set forth
in 42 CFR §422.50. 

  

	 	3.	 If an employer/union elects to enroll individuals eligible for its employer/union-only group MA-PD through a group enrollment process, MA Organization will not be
subject to the individual enrollment requirements set forth in 42 CFR §422.60 and §423.32(b). MA Organization agrees that all individuals eligible for its employer/union-only group MA-PD will be advised that the employer/union contracting
with MA Organization to offer an employer/union-only group MA-PD (hereinafter referred to as “employer/union”) intends to enroll them into the 

  

 Page 6 of 9 

 MA-PD EMPLOYER/UNION-ONLY GROUP CONTRACT ADDENDUM 
  

	 	 
plan through a group enrollment process unless the individual affirmatively opts out of such enrollment. MA Organization agrees that all such individuals
will be provided this information at least 30 days prior to the effective date of the individual’s enrollment in the employer/union-only group MA-PD. MA Organization agrees the information must include a summary of benefits offered under the
employer/union-only group MA-PD, an explanation of how to get more information on such plan, and an explanation of how to contact Medicare for information on other MA-PD plans that might be available to the individual. In addition, MA Organization
agrees that all information necessary to effectuate enrollment must be submitted electronically to CMS, consistent with CMS instructions. 

  

	D.	BENEFICIARY PROTECTIONS 

  

	 	1.	MA Organization’s employer/union-only group MA-PDs will not be subject to the marketing requirements set forth in 42 CFR §422.80 and §423.50 or the information
requirements of 42 CFR §423.48. 

  

	 	2.	CMS agrees that the disclosure requirements set forth in 42 CFR §§423.128 and in the “Marketing Materials Guidelines for Medicare Advantage-Prescription Drug Plans
(MA-PDs) and Prescription Drug Plans (PDPs),” will not apply with respect to any employer/union-only group MA-PD when the employer/union is subject to alternative disclosure requirements (e.g., the Employee Retirement Income Security Act of
1974 (“ERISA”)) and fully complies with such alternative requirements. MA Organization agrees to provide beneficiary plan documents, including summary plan descriptions and all other beneficiary communications that provide descriptions of
the benefit offerings, to CMS at the time of use and to current and/or potential enrollees on a timely basis. CMS may review these documents in the event of beneficiary complaints or for other reasons and require changes if CMS determines that such
changes are necessary. 

  

	E.	SERVICE AREA, FORMULARIES AND PHARMACY ACCESS 

  

	 	1.	CMS agrees that employer/union-only group Local MA-PDs that provide coverage to individuals in any part of a State can offer coverage to retirees eligible for the
employer/union-only group MA-PD throughout that State. CMS also agrees that employer/union-only group Regional MA-PDs that provide coverage to individuals in any part of a Region can offer coverage to retirees eligible for the employer/union-only
group MA-PD throughout that Region. 

  

	 	2.	 CMS agrees that Regional MA-PDs and non-network Private Fee-for-Service employer/union-only group MA-PDs may extend coverage beyond their designated service areas
to all enrollees of a particular employer/union-only group plan, regardless of where they reside in the nation, when the most substantial portion of the employer’s employees (or in the case of a union, the union’s participants) reside in
the service area where the MA Organization, either itself or 

  

 Page 7 of 9 

 MA-PD EMPLOYER/UNION-ONLY GROUP CONTRACT ADDENDUM 
  

	 	 
through subcontractors or other partners, is a provider of non-group MA-PD coverage. The MA Organization agrees to conduct an actual review of where the
substantial portion of the employer’s/union’s employees/participants reside and to maintain adequate supporting documentation of such review (including the date of such review, by whom the review was conducted, and any other relevant
documentation to substantiate the review), and to permit CMS to audit and review such documentation. Such expanded service areas must have convenient Part D pharmacy access sufficient to meet the needs of enrollees wherever they reside.

  

	 	3.	MA Organization agrees to utilize, as the formulary for any employer/union-only group MA-PD, a base formulary that has received approval from CMS, in accordance with CMS formulary
guidance, for use in a non-group MA-PD offered by MA Organization. Except as set forth in 42 CFR §423.120(b) and sub-regulatory guidance, MA Organization may not modify the approved base formulary used for any employer/union-only group MA-PD by
removing drugs, adding additional utilization management restrictions, or increasing the cost-sharing status of a drug from the base formulary. Enhancements that are permitted to the base formulary include adding additional drugs, removing
utilization management restrictions, and improving the cost-sharing status of drugs. 

  

	 	4.	For any employer/union-only group MA-PD, MA Organization agrees to provide Part D benefits in the plan’s service area utilizing a pharmacy network and formulary that meets the
requirements of 42 CFR §423.120, with the following exception: CMS agrees that the retail pharmacy access requirements set forth in 42 CFR §423.120(a) (“Tricare” standards) will not apply when the employer/union-only group
MA-PD’s pharmacy network is sufficient to meet the needs of its enrollees throughout the employer/union-only group MA-PD’s service area, as determined by CMS. CMS may periodically review the adequacy of the employer/union-only group
MA-PD’s pharmacy network and require the employer/union-only group MA-PD to expand access if CMS determines that such expansion is necessary in order to ensure that the employer/union-only group MA-PD’s network is sufficient to meet the
needs of its enrollees. 

  

	F.	PAYMENT TO MA ORGANIZATION 

  
 Except as provided in II.F.1 through 4, payment under this Addendum will be governed by the rules of Subparts G and J of 42 CFR Part 423. 
  
 1. MA Organization acknowledges that the risk sharing, plan entry and retention bonus provisions of section 1858 of the Act
and 42 CFR §422.458 shall not apply to any employer/union-only group Regional MA-PDs. 
  
 2. MA Organization acknowledges that the risk-sharing payment adjustment described in 42 CFR §423.336 is not applicable for any employer/union-only group MA-PD enrollee. 
  

 Page 8 of 9 

 MA-PD EMPLOYER/UNION-ONLY GROUP CONTRACT ADDENDUM 
  

 3. MA Organization will receive a monthly direct subsidy under 42 CFR Subpart G for each
employer/union-only group MA-PD enrollee equal to the amount of the national average monthly bid amount (not its approved standardized bid), adjusted for health status (as determined under 42 CFR §423.329(b)(1)) and reduced by the base
beneficiary premium for the employer/union-only group MA-PD, as adjusted under 42 CFR §423.286(d)(3), if applicable. The further adjustments to the base beneficiary premium contained in 42 CFR §423.286(d)(1) and (2) will not apply.

  
 4. MA Organization will not receive monthly reinsurance
payment amounts in the manner set forth in 42 CFR §423.329(c)(2)(i) for any employer/union-only group MA-PD enrollee, but instead will receive the full reinsurance payment following the end of year reconciliation as described in 42 CFR
§423.329(c)(2)(ii). 
  
 5. For non-calendar year plans:

  
 (a) CMS payments will be determined on a calendar year basis;

  
 (b) Low income subsidy payments and reconciliations will be
determined based on the calendar year for which the payments are made; and 
  
 (c) MA Organization acknowledges that it will not receive reinsurance payments under 42 CFR §423.329(c). 
  
 ARTICLE III 
 RECORD RETENTION AND
REPORTING REQUIREMENTS 
  

	A.	GENERAL REPORTING REQUIREMENTS 

  
 CMS agrees that MA Organization is not subject to the general public reporting requirements contained in 42 CFR §422.516(a) and §423.514(a) for its
employer/union-only group MA-PDs to the extent that: (1) such information is required to be reported to enrollees and to the general public by other law (including ERISA or securities laws) or by a separate contractual agreement and (2) MA
Organization fully complies with such requirements. 
  

 Page 9 of 9

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00092-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00092-of-00352.parquet"}]]