Edit by LM 3/26/22 Not Apprvd


Employer Group Waiver Plan


All the information you need about the Employer Group Waiver Plan in one place.



EGWP: An opportunity for AlaskaCare to maintain existing pharmacy benefits for Medicare-eligible retirees and achieve cost savings for years to come.

Effective January 1, 2019, AlaskaCare implemented an Employer Group Waiver Plan for all Medicare-eligible members covered under the AlaskaCare retiree health plan. An Employer Group Waiver Plan, known as an EGWP or “Egg Whip,” is a program offered by the federal government that increases federal subsidies for prescription drugs for the retiree health trust. This was an administrative change to how pharmacy benefits were previously managed for Medicare-eligible retirees and dependents. The pharmacy benefit for AlaskaCare retirees remains the same.

AlaskaCare was already receiving a federal subsidy for the retiree health prescription drug benefit. Moving to an EGWP plan means the retiree health trust will receive significantly higher subsidies than we did last year, saving the trust up to $20 million annually and providing $40-$60 million each year in additional State savings through a reduction in the unfunded liability. The Division must manage the health plan to ensure retirees can access their earned benefits throughout the entire course of their life, and an AlaskaCare EGWP allows the State to keep existing pharmacy benefits for Medicare-eligible retirees and beneficiaries, while increasing federal reimbursement of existing costs, reducing the State’s direct costs for these benefits in the long-term.

More than 90% of states that provide drug benefits to Medicare retirees have already implemented EGWPs. As Alaska, along with the rest of the U.S., faces rising health care costs, EGWPs are a proven win-win for maintaining high quality coverage for today’s and tomorrow’s Alaska retirees.

An AlaskaCare EGWP is just one way the Division is looking to reduce the cost of health care while maintaining or improving benefits for retirees. As part of the ongoing retiree health plan modernization project, the Division is evaluating adding benefits like preventive care, enhanced travel, and removing the lifetime maximum. Our goal is to improve, protect, and sustain the health plan as it continues to offer high quality benefits for current and future generations of retirees.

If you have questions or concerns about EGWPs, we want to hear from you! You may contact the Division of Retirement and Benefits at:
Alaska Department of Administration
Division of Retirement and Benefits
P.O. Box 110203
Juneau, AK 99811-0203

You can also send comments via email to or reach the Division by phone toll-free at (800) 821-2251 or in Juneau at (907) 465-4460.

You can expect to receive information from Medicare three months prior to turning age 65, and though you should enroll in Medicare Part A and B, you do not need to enroll in an individual Medicare Part D plan. You will be automatically enrolled in the AlaskaCare EGWP by the State.

In most cases you will not be charged a Medicare Part D premium when you are enrolled in enhanced EGWP. The AlaskaCare retiree plan, through OptumRx.com , will enroll eligible retirees into the AlaskaCare EGWP. AlaskaCare will pay a monthly administrative cost to the PBM for each enrolled member, and most retirees and their Medicare-eligible dependents will not be required to pay a premium to Medicare. CMS does require a premium payment of high-income individuals who are eligible for Medicare.

You can opt out of the enhanced EGWP, but this is highly discouraged and will result in higher costs for both you and the health plan. Centers for Medicare and Medicaid Services (CMS) require that you be given the opportunity to opt out of EGWP. Retirees that opt out of the AlaskaCare EGWP will be placed in a prescription drug program that is much different than the plan prescription drug benefits offered today. This will result in increased out-of-pocket expenses for you or your Medicare-eligible dependents.

If you are considering opting out because you are covered under another Medicare plan (e.g. Medicare Advantage that includes prescription drug coverage or another EGWP), in lieu of opting out you can provide a copy of your Medicare Advantage or EGWP ID card to the Division and we will remove you from the enhanced EGWP and place you in the AlaskaCare standard pharmacy benefit plan.

Medicare has a list of drugs that require pre-authorization. These required prior authorizations do not include any “step therapy” requirements. (“Step therapy” is when an insurance plan requires a member to try certain lower-cost medications first before covering a more expensive type of medication.) You may have to get a prior authorization for drugs where it was not previously required or seek prior authorization for drugs that have already been pre‐authorized through Aetna under the current plan. Medicare does not allow prior authorizations from another plan to be transferred to the EGWP.

This does not mean your the Pharmacy Benefit Manager (PBM) will decide what medication your doctor can prescribe. Your doctors can still prescribe whatever medication they think is most appropriate for you and your co-pay will remain the same as it is today, $0 mail order, $4 generic, and $8 brand-name (or $0 for those covered under more than one AlaskaCare plan). Depending on what they prescribe, the medication may require prior authorization. And just like today, all claims, not just prescription drug claims, must be medically necessary in order to be covered by the health plan. Determinations of medical necessity are part of the claims processing function for all health care plans and can be complex depending on the situation. AlaskaCare has long relied on our Pharmacy Benefit Manager (PBM) to make evidence-based decisions on medical necessity as part of the pharmacy claims processing function, and this process will continue under an AlaskaCare EGWP.

If you have multiple medical conditions and high drug-utilization, you may be enrolled in the Medicare Medication Therapy Management Program by the State. Medicare developed this program as a member protection. This program helps you and your doctor make sure that your medications are working to improve your health and provides a comprehensive review that includes: how your medications are working; if they have side effects; and any interactions between drugs you are taking. You can opt out of this program.

When you reach the eligible age you will be mailed a welcome kit with information about your pharmacy benefits the first week of December 2018. You or your health care provider can begin the prior authorization process by contacting OptumRx, who will work with you on prior authorizations. In addition, the Division will work with OptumRx to provide targeted communications to members who are known to be taking medications that require prior authorization.

If you are considering opting out because you are covered under another Medicare plan (e.g. Medicare Advantage that includes prescription drug coverage or another EGWP), in lieu of opting out you can provide a copy of your Medicare Advantage or EGWP ID card to the Division and we will remove you from the enhanced EGWP and place you in the AlaskaCare standard pharmacy benefit plan.

Certain high-income retirees are required to pay an extra premium surcharge, known as an Income Related Monthly Adjustment Amount, or IRMAA. This is similar to the surcharge for high-income enrollees in the Medicare Part B plan. If you are an individual or a married couple earning more than the threshold, you will be required to pay an extra surcharge for being enrolled in the AlaskaCare Employer Group Waiver Program (EGWP) because it is a group Medicare Part D plan. Retirees whose household income is below this threshold will not be subject to the IRMAA premium surcharge.

If you are subject to the Medicare Part D IRMAA surcharge, you will be reimbursed.

For all Medicare plans, the IRMAA will be deducted directly from your monthly Social Security check (if you qualify for Social Security) or will otherwise be invoiced to you directly each month. If you are charged a Medicare Part D IRMAA for your prescription drug coverage, the Division of Retirement and Benefits will reimburse you for the full cost of the Medicare Part D premium surcharge each month, through a tax-advantaged Health Reimbursement Arrangement (HRA) account. If you receive a bill from Medicare, you should pay the bill timely, and contact the Division to learn about your reimbursement options.

The Division of Retirement and Benefits has partnered with OptumRx and Optum Bank to create an efficient way for members to receive reimbursement for their Part D IRMAA surcharge.

What do you need to know?

  • You need to set up your HRA account every year, since IRMAA surcharges are based on your annual income and your income may change from year to year.
  • If you are not assessed a IRMAA surcharge this does not apply to you this year.
  • The deadline for submitting your IRMAA for reimbursement is December 31, .

How will I know if I have to pay an IRMAA, and how much it will be?

Each year, if you are Medicare-eligible, you will be notified by the Social Security Administration about your plan. This includes if you are required to pay an IRMAA and at what amount. The Social Security Administration uses your Modified Adjusted Gross Income (MAGI) to determine if the IRMAA applies to you and, if so, how much you will have to pay. MAGI is the sum of:

  • Adjusted Gross Income (AGI), which can be found on the last line your IRS 1040 tax form (line 37 on form 1040, line 21 on form 1040A, or line 4 on form 1040EZ), plus
  • Any tax-exempt interest income (line 8b on form 1040).

The Social Security Administration requests income information from the IRS for the tax year that is two years prior to the surcharge year. IRMAA is automatically re-determined each year as long as you file an income tax return. The below table shows the IRMAA for . The MAGI and IRMAA is subject to change from year to year.

Please review the table below to see if your income qualifies you to be assessed an IRMAA surcharge based on your Modified Adjusted Gross Income (MAGI).

Part D IRMAA Amounts
Individual Modified Adjusted Gross Income (MAGI) Household Modified Adjusted Gross Income (MAGI) Monthly Part D IRMAA Surcharge
Less than or equal to $91,000
Less than or equal to $182,000
Not assessed a surcharge
Greater than $91,000 and less than or equal to $114,000
Greater than $182,000 and less than or equal to $228,000
$12.40
Greater than $114,000 and less than or equal to $142,000
Greater than $228,000 and less than or equal to $284,000
$32.10
Greater than $142,000 and less than or equal to $170,000
Greater than $284,000 and less than or equal to $340,000
$51.70
Greater than $170,000 and less than or equal to $500,000
Greater than $340,000 and less than or equal to $750,000
$71.30
Greater than $500,000
Greater than $750,000
$77.90

How do I establish a HRA account or Setup Direct Deposit?

OptumRx will handle all your IRMAA needs. Follow these steps to establish your Part D IRMAA reimbursement account online:

  • Register and/or log in to your OptumRx.com account either online or through the mobile app.
  • Navigate to forms by clicking on the "Information Center" tab on the Navigation bar at the top, select "Programs and Forms", then click on “IRMAA HRA Enrollment Form”.
  • Complete the online IRMAA HRA Enrollment Form.
  • Upload as an attachment a copy or image of your letter from Social Security or a Medicare Bill that shows what your Part D IRMAA surcharge will be.
  • OptumRx will confirm your eligibility and set up your Health Reimbursement Account (HRA) with Optum Bank within 5 to 7 business days of receipt.
  • Once your HRA has been set up with Optum Bank, they will send you a Welcome Packet within 5 to 7 business days, which will include information on signing up for Direct Deposit.
  • Once you receive your Welcome Packet, log in to OptumBank.com to view your HRA account status/balance or to sign up for Direct Deposit.

If you have any questions on how to submit your IRMAA documents online or if you do not have internet access and would like to submit paper documentation, please contact OptumRx at (855) 409-6999 or email .

What are my options if I am required to pay the extra surcharge?

If you receive notice that you are required to pay the IRMAA surcharge for the enhanced EGWP, follow the steps listed above to request reimbursement. The Division will fund a tax advantaged HRA account that can be used to reimburse you the Part D IRMAA surcharge amount by paper check or through electronic funds transfer to a bank account of your choosing.

How long do I have to submit a claim to the Health Reimbursement Arrangement (HRA) account?

To receive reimbursement for the Part D IRMAA surcharge, you should submit the HRA claim as soon as possible, but not later than 12 months after the date you incurred the expenses. Retroactive reimbursements will not be issued for claims received beyond 12 months. Example: if you are assessed a Part D IRMAA surcharge in 2020, you will have until December 31, 2021 to file the HRA claim for reimbursement.

What if I refuse to pay the extra surcharge?

If you refuse to pay the extra surcharge for your Medicare Part D coverage, Medicare will cancel your enrollment in the AlaskaCare enhanced EGWP plan. This will be treated as an opt-out from the plan, and you will be placed in a prescription drug program that is much different than the plan prescription drug benefits offered today. This alternative plan may result in increased out-of-pocket expenses for you or your Medicare-eligible dependents. Please contact the Division if you have concerns about this surcharge or would like assistance with understanding the options available to you.

Who can I call if I need assistance understanding the surcharge?

questions For general about your pharmacy benefits, contact OptumRx, the AlaskaCare pharmacy benefits manager at (855) 409-6999. For questions related to your IRMAA surcharge, you may contact Social Security at (800) 772-1213. For more information about the HRA account options, contact the Division at (907) 465-4460 or toll-free at (800) 821-2251.

Page Last Modified: 06/01/22 10:41:56