Title
Resolution to Renew the Contract with Medicare Part D Advisors, Inc. to Fulfill Administrative and Actuarial Services to the City Pursuant to Medicare Part D Legislation
Memorandum
The attached Resolution authorizes the City Administrator to execute the renewal contract for administrative services with Medicare Part D Advisors, Inc. Part D Advisors, Inc. keeps a percentage of the funds reimbursed to the City by Medicare. There is no adverse budgetary impact; the City receives monthly a government subsidy.
The Medicare Part D program added voluntary outpatient prescription drug benefits to the Medicare program effective January 1, 2006. Medicare pays an employer a subsidy of up to 28% of its prescription drug costs if its retirees covered under the retiree medical plan do not participate in the Medicare Part D program.
In order to qualify for the subsidy, an employer must provide an independent actuarial valuation on an annual basis. The actuary must attest that the employer’s benefit is more generous than that offered by Medicare through preparation of the “Attestation of Actuarial Equivalence.” The subsidy is calculated on costs between Medicare Part D’s $250 deductible and $5,000 limit. Claims cost must be reviewed and adjusted for manufacturer rebates, dispensing fees, and copayments. Data must be reviewed as frequently as submitted to Medicare, depending upon the payment option the employer elects.
Current and future retirees must be notified by the employer on an ongoing basis of the effects of their election to participate in the Medicare Part D program by providing the “Certification of Creditable Coverage.”
In all instances, prescription drug coverage under the City-provided retiree medical program is more generous than that offered by Medicare Part D. Therefore, the City continues to submit documentation to receive the subsidy.
This does not adversely impact the 2008-2009 Fiscal Year budget, as the City receives a refund from Me...
Click here for full text