Important Enhancement to RDS Payment Frequency

CMS' RDS Center is pleased to announce that beginning May 8, 2020, all RDS applications' Payment Frequency will be set to a maximum frequency of monthly interim payments, consistent with the general payment rules regarding timing set forth in  42 C.F.R. 423.888(b)(1) . This enhancement will be applied to all current and active RDS applications, as well as all future RDS applications. Plan Sponsors who had previously selected the Quarterly or Annual Payment Frequency option on their current applications will now be eligible to submit interim costs and request interim payments more frequently than quarterly or annually, if so desired. No action is required on the part of the Plan Sponsor or its Vendors to implement this new feature.

  Cost Threshold & Cost Limit Amounts for Plan Years Ending in 2021

On Monday, April 6, 2020 the Centers for Medicare & Medicaid Services (CMS) announced the Cost Threshold and Cost Limit amounts that apply to Plan Sponsors participating in CMS' Retiree Drug Subsidy (RDS) Program, with qualified prescription drug plans that end in 2021, as well as the parameters for Medicare Part D plans in 2021. Per 42 CFR 423.886(b)(3), the cost threshold and cost limit for qualified retiree prescription drug plans are updated using the Annual Percentage Increase.

For more detailed information on the Cost Threshold and Cost Limit amounts for 2021, and the Medicare Part D Benefit Parameters, review CMS'  2021 Announcement .

Here are Options for Easing Medicare Costs if Your Income Has Dropped If you’ve been paying more than the standard premium amounts for Part B (outpatient care coverage) or Part D (prescription drugs) through so-called income-related monthly adjustment amounts, or IRMAAs, a sudden reduction in income may justify eliminating or reducing those surcharges . Of Medicare’s 62 million beneficiaries, about 7% — 4.3 million people — pay IRMAAs, which kick in if your modified adjusted gross income is more than $87,000. For married couples filing joint tax returns, they start above $174,000.

Did your Group Health Plan Get all your RDS Dollars? The RDS program reimburses Plan Sponsors up to 28% of all allowable Retiree Drug expenses to help subsidize their financial obligation. The program operates with a budget of $6 billion a year, but Plan Sponsors have collected an average of only $4 billion, meaning there is money being left on the table .

Upcoming RDS Deadlines

Reconciliations (plan year end | recon. due date)  02/2019 | 06/01/2020 03/2019 | 06/30/2020 04/2019 | 07/31/2020 Applications (plan year start | app. due date)  09/01/2020 | 06/02/2020 10/01/2020 | 07/02/2020 11/01/2020 | 08/03/2020

‌ ‌ ‌