October 31 deadline leaves many scrambling to understand complex options
Employers are tentatively moving ahead with plans to continue providing a prescription drug benefit within their retiree medical plans, according to a recent survey.
Towers Perrin, a global professional services firm, developed the survey that was conducted by the International Society of Certified Employee Benefit Specialists (ISCEBS) in anticipation of the upcoming Medicare Part D deadline. Employers have four financial incentives offered through Part D, which are designed to ease some of the burden of rapidly increasing prescription drug costs.
Of the employers that indicated they intend to continue their retiree medical plans, the majority (70 percent) said they plan to collect the drug subsidy in return for providing drug coverage. Very few indicated they are choosing the other three options. In fact, none indicated they will contract with CMS to sponsor a Medicare Prescription Drug Plan.
The survey also revealed that many companies may be missing an opportunity to cut costs. Nearly three-quarters of respondents do not expect to offer Medicare Advantage plans to Medicare-eligible retirees. The Medicare Advantage plans combine coverage of all Part A and Part B benefits and, as of 2006, Part D as well.
Other survey findings:
- An overall low level of confidence of the success and longevity of Part D plans
- Employers currently provide a broad range of financial support to their Medicare-eligible retirees
- Initial progress reports of organizations planning on taking advantage of the subsidy
To view the survey report, "Employers Make Progress Preparing for Medicare Prescription Drug Benefit," go to www.iscebs.org/PDF/medrx_survey.pdf.
