Is a subsidy available to employers and unions for the purpose of maintaining prescription drug coverage for retirees?
Yes. Employers and unions may receive subsidies for the purpose of maintaining drug coverage. They must attest that the coverage is of equal or greater actuarial value to Part D. In 2006, the subsidy for each eligible individual equals 28% of allowable costs associated with enrollee drug costs between $250 and $5000 (indexed in later years to the growth in Medicare’s per capita spending on Part D drugs). The allowable costs exclude admnistrative costs and any discounts or rebates the employer receives.
