The following is the text from the email distributed by the RDS on April 17, 2008:

Attention: All RDS Secure Web Site Users

On April 15, 2008, the Centers for Medicare & Medicaid Services (CMS) published revisions to the Retiree Drug Subsidy (RDS) regulations in the Federal Register. Many of the revisions provide additional flexibility to RDS Plan Sponsors, and reflect existing policy that CMS has already published in other documents.  Among the provisions of the revised regulations:

·        When performing the actuarial equivalence test, a noncalendar year RDS plan’s actuary can use either the current or subsequent year’s Medicare Part D initial coverage limit, cost-sharing amounts, and annual out-of-pocket threshold for defined standard drug coverage, when the attestation is submitted within 60 days of the publication of the following year’s cost limits.

·        CMS has the discretion to set an end-of-month deadline for RDS applications. An end-of-month deadline would be administratively simpler for both Plan Sponsors and CMS to track, as opposed to the current deadline, which is 90 days prior to the beginning of a Plan Sponsor’s RDS plan year.  (This change will not occur unless and until CMS issues further guidance).

·        Plan Sponsors can aggregate a subset of the benefit options in a qualified retiree prescription drug plan for the actuarial equivalence net test, in addition to aggregating all the options or evaluating each option individually.

·        A Plan Sponsor must actually provide supplemental drug coverage for their retirees who elect to enroll in a Medicare Part D plan, in order to take advantage of the Medicare supplemental adjustment when determining whether its qualified retiree prescription drug plan is actuarially equivalent to Medicare standard prescription drug coverage.

·        Plan Sponsors must provide an actuarial attestation no later than 90 days before the implementation of a material change to the Plan Sponsor’s drug coverage, and the term “material change” means the addition of a benefit option that does NOT have the impact of causing the actuarial value of the retiree prescription drug coverage to fail the actuarial equivalence standards set forth in the regulations.  The final regulation also states that a Plan Sponsor must notify CMS, in a form and manner specified by CMS, no later than 90 days before the implementation of a change to the drug coverage that does have the impact of causing the actuarial value of the retiree prescription drug coverage to fail the actuarial equivalence standards set forth in the regulations.

The revisions to the regulations formally take effect June 9, 2008, although many of the revisions are clarifications to existing guidance that is already in effect. The revisions can be found on page 20486 of the April 15, 2008 Federal Register (73 FR 20486). 

If you have any questions about the RDS provisions of these regulations, please see the contact listed in the regulations for the Subpart R provisions.

Sincerely,

CMS’ RDS Center