(a) Carrier requirement to offer Medicare Part D prescription drug benefits. (1) A carrier that offers a PSHB plan must provide prescription drug benefits to any Postal Service annuitant and member of family of such annuitant who is a Part D-eligible individual (as defined in section 1860D-1(a)(3)(A) of the Social Security Act) through a Medicare Part D EGWP as described as employer-based retiree health coverage under section 1860D-22(b), (c)(1), and (3)(A) of such Act .

(2) A carrier must provide Medicare Part D coverage through a prescription drug plan (PDP), as defined in section 1860D-41(a)(14) of such Act, or through contracts between the PSHB plan and a PDP sponsor, as defined in section 1860D-41(a)(13) of such Act, of such a prescription drug plan.

(3) A carrier may, in addition to offering a PDP required under paragraph (a)(2) of this section and subject to OPM's approval, offer a Medicare Advantage plan with prescription drug coverage (MAPD), as defined in section 1860D-1(a)(3)(C) of such Act.

(b) Prescription drug coverage under a PSHB plan through Medicare Part D. A Postal Service annuitant and a member of family of such annuitant who is a Part D-eligible individual must be enrolled in a PSHB plan's Part D EGWP in order to receive prescription drug coverage under the PSHB plan. The prescription drug benefit is not covered under a PSHB plan for a Part D-eligible individual who is not enrolled in the PSHB plan's Part D EGWP.

(1) Prescription Drug Coverage for Medicare Part D-eligible annuitants and members of family residing outside of the United States. A carrier will not group enroll, as described in paragraph (d) of this section, a Medicare Part D-eligible Postal Service annuitant or a member of family of such annuitant who resides outside of the United States (which includes the States, the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, American Samoa, and the Northern Mariana Islands) into the Medicare Part D EGWP offered by the plan. A carrier must provide prescription drug coverage through the PSHB plan to these individuals.

(c) PSHB plan enrollment or disenrollment and Medicare EGWPs. Changes to enrollment during Open Season under § 890.301(f) or because of a qualifying life event as defined in part 892 of this chapter apply with respect to changes to PSHB plans that include a Medicare Part D EGWP.

(d) Carrier requirements for group enrollment into Medicare EGWPs. A carrier must comply with all applicable CMS requirements regarding Part D-eligible individual group enrollment into Medicare EGWPs, including all applicable CMS notice requirements. Nothing in this section shall be construed as affecting an individual's ability to select a PSHB plan pursuant to § 890.1606.

(1) PDP EGWP. Annually at the conclusion of Open Season under § 890.301(f), or when an enrollee makes a change to their PSHB enrollment because of a qualifying life event under § 892.101 of this chapter, a carrier must automatically group enroll a Part D-eligible individual, who is covered by the carrier's PSHB plan, into the PSHB plan's PDP EGWP, unless the individual:

(i) Elects to enroll or is enrolled in the PSHB plan's MAPD EGWP described in paragraph (d)(2) of this section; or

(ii) Has opted out of group enrollment in the PSHB plan's PDP EGWP or MAPD EGWP for the current or upcoming plan year, as applicable.

(2) MAPD EGWP. Annually, at the conclusion of Open Season under § 890.301(f), or when an enrollee makes a change to their PSHB enrollment because of a qualifying life event, a carrier must automatically enroll a Part D-eligible individual who is covered by the carrier's PSHB plan into the carrier's PSHB plan's MAPD EGWP if the individual elects to enroll in the carrier's MAPD EGWP. During the transitional Open Season, a carrier must automatically enroll a Part D-eligible individual into the carrier's 2025 PSHB plan's MAPD EGWP if the individual is covered by that carrier's 2024 FEHB plan's MAPD EGWP, and if the individual elects the carrier's 2025 PSHB plan or is automatically enrolled into the carrier's 2025 PSHB plan under § 890.1605.

(3) Notice. In addition to the CMS notice requirements, each year, not less than 30 calendar days prior to the start of Open Season under § 890.301(f), a carrier must send written notice to Part D-eligible individuals who are enrolled in the carrier's PSHB plan that they will be group enrolled into the PDP EGWP offered under the carrier's PSHB plan. In addition, when an enrollee makes a change because of a qualifying life event, a carrier must send such written notice to the Part D-eligible individuals covered under the enrollment. The notice shall state:

(i) The carrier intends to enroll the individual in the carrier's Medicare Part D PDP EGWP as described under paragraph (d)(1) of this section, or MAPD EGWP as described under paragraph (d)(2) of this section as applicable, during Open Season under § 890.301(f), or as a result of a qualifying life event, as applicable;

(ii) The individual may affirmatively opt out of group enrollment;

(iii) Opting out of group enrollment means that the individual is deciding not to be enrolled in the PSHB plan's PDP EGWP, or MAPD EGWP if applicable;

(iv) The date by which the individual must opt out of group enrollment, if the individual chooses to opt out;

(v) The procedure for how an individual affirmatively opts out of group enrollment;

(vi) The individual will not receive prescription drug coverage under the PSHB plan if the individual is not enrolled in the PSHB plan's PDP EGWP, or MAPD EGWP if applicable; and

(vii) That no adjustment will be made to the enrollee's share of the PSHB plan option premium.

(4) Additional requirements for PSHB plans providing an MAPD EGWP. If a PSHB plan offers an MAPD EGWP, the carrier must comply with all applicable Medicare requirements and the carrier must also provide the notices as described in (d)(3) of this section. In addition, such notice must state how the individual can enroll in the PSHB plan's PDP EGWP if the individual is opting out of group enrollment or disenrolling from a PSHB plan's MAPD EGWP during Open Season or as a result of a qualifying life event, the date by which the individual must enroll in the PDP EGWP, and must state that if the individual is required to be enrolled in Medicare Part B in order to maintain eligibility for PSHB plan coverage and does not qualify for an exception under § 890.1604, the individual must remain enrolled in Part B.

(5) Notices to be shared with OPM. A carrier must provide OPM with the notices under this section and the notices that CMS requires regarding PDP EGWP and MAPD EGWP group enrollment each year, at the time the carrier submits its benefits and rate proposal.

(e) Effect of opting out of group enrollment into or disenrolling from a Medicare EGWP—(1) Effect of opting out of group enrollment. By opting out of group enrollment in a PSHB plan's Medicare PDP EGWP or MAPD EGWP, as applicable, the individual will not receive prescription drug coverage under the PSHB plan unless, during the Open Season or pursuant to the qualifying life event in which the individual opted out of group enrollment, the individual elects to enroll in a Part D EGWP under their PSHB plan.

(2) Opportunity to enroll other than group enrollment. A Part D-eligible individual may enroll in a PDP EGWP or, if eligible, an MAPD EGWP, under a PSHB plan, under the same conditions that govern enrollment in a PSHB plan during Open Season or pursuant to a qualifying life event.

(3) Disenrollment. An individual may disenroll from their PSHB plan's Part D EGWP at any time during the plan year which means they will not receive prescription drug coverage under the PSHB plan.

(4) Enrollment flexibility. A Part D-eligible individual who is not enrolled in the PDP EGWP or MAPD EGWP, as applicable, for prescription drug benefits offered by their PSHB plan may request enrollment into their PSHB plan's EGWP outside of Open Enrollment or a qualifying life event to correct errors.

(i) Part D EGWP Enrollment Flexibility. A Part D-eligible individual who opts out of Part D EGWP group enrollment or disenrolls from their PSHB plan's Part D EGWP can request enrollment into their plan's Part D EGWP within 90 days of the start of plan year or 90 days from the effective date of coverage after a qualifying life event that permitted a plan change. Enrollments made under this paragraph (e)(4)(i) will be retroactive to the extent consistent with applicable CMS regulations.

(ii) Exceptional circumstances. A Part D-eligible individual who opts out of Part D EGWP group enrollment or disenrolls from their PSHB plan's Part D EGWP can request enrollment into their plan's Part D EGWP 91 days or more after the start of the plan year or the effective date of coverage after a qualifying life event that permitted a plan change as determined by OPM. Enrollments made under this paragraph (e)(4)(ii) will be prospective.

(iii) Changes to enrollment under this paragraph (e)(4) are limited to new enrollments into the individual's current PSHB plan's Part D EGWP.

(f) PDP EGWP and MAPD EGWP prescription drug benefits. A carrier must provide prescription drug benefits to a PSHB EGWP plan's Part D-eligible covered individuals that are equal to or better than the prescription drug benefits provided to that PSHB plan's covered individuals who are not eligible to enroll in Part D and not enrolled in the plan's EGWP, subject to paragraph (f)(3) of this section. For purposes of this section:

(1) A carrier must ensure that a Medicare Part D EGWP within the PSHB Program includes the same medications, products, and supplies covered in the corresponding plan option's PSHB pharmacy benefit with the same or lower cost sharing, to the extent consistent with applicable Medicare provisions; and

(2) A carrier must not reduce or otherwise limit prescription drug benefits to meet this standard, for example by limiting the coverage of medications, products, and supplies or increasing cost sharing of the prescription drug benefits provided to individuals covered under the PSHB plan who are not eligible for Part D.

(3) A carrier may request OPM approval to offer different medications, products, or supplies, or modify cost sharing on their EGWP formulary. OPM has discretion to determine whether and to what extent a carrier request under this subsection is necessary and consistent with 5 U.S.C. 8903c.

[89 FR 85031, Oct. 24, 2024]